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Chapter 7. Confused about discharging tax debt. Would 2010 taxes qualify?

Los Angeles, CA |

I read the hurdles, regarding assessment date three-year-old taxes, etc. But I don't really understand how to apply the three-year rule. In other words if I filed today, could the tax debt I owe from tax year 2010 be dischargeable? It was filed on time. Would it be after April 15?

Attorney Answers 4

  1. Your 2010 taxes cannot possibly be dischargeable until April of 2014 ... and that's assuming you filed them by the April deadline in 2011.

  2. No, they would not and don't feel bad. A lot of attorneys don't even handle this, it can be very very confusing. There is an entire process of review surrounding the three year rule to determine whether you can discharge taxes in bankruptcy. By that I mean, when they were filed, if an extension was filed, whether you have a lien, etc. And just so you (and other readings this) know, it's best to have that analysis done before filing. Too many people file "thinking" taxes are dischargeable only to find out they are not, after the fact. Always get an experienced attorney to analyze the dischargeability of your taxes before filing.

  3. Nope! After 4/15/13 your 2009 taxes would be dischargeable.

    Be sure to designate "best answer." If you live in Oregon, you may call me for more detailed advice, 503-650-9662. Please be aware that each answer on this website is based upon the facts, or lack thereof, provided in the question. To be sure you get complete and comprehensive answers, based upon the totality of your situation, contact a local attorney who specializes in the area of law that involves your legal problem. Diane L. Gruber has been practicing law in Oregon for 26 years, specializing in family law, bankruptcy, estate planning and probate. Note: Diane L. Gruber does not represent you until a written fee agreement has been signed by you and Diane L. Gruber, and the fee listed in the agreement has been paid.

  4. I would amend my colleagues' prior answers slightly. The "three year rule" for discharging taxes is in Bankruptcy Code Section 507(a)(8)(A)(i), and actually starts the 3 year time period ticking from the date the tax return is last due, including extensions, which for individual income tax filers is usually October 15 of the calendar year following the tax year (or the next business day thereafter).

    This means that if a bankrupt person filed his/her 2009 1040 tax return before April 15, 2010 (or anytime up to the October deadline), s/he would have to wait until at least October 16, 2013 to file a bankruptcy to satisfy the "three year rule" for discharging tax debt.

    You really should obtain free tax transcripts for all the years in question from the IRS, then consult a qualified attorney before deciding what to do and when to file.

    This post is for informational purposes only and is not specific legal advice for your matter. Please seek advice of an attorney for guidance in your specific legal matter. I am a lawyer and debt relief agency helping persons file bankruptcy under the U.S. Code.

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