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Can You File Bankruptcy Without Tax Returns

How Soon Can You File Chapter 13 After Chapter 7 Bankruptcy

Can I File Bankruptcy on Back Taxes?

Bankruptcy is a way to deal with mounting debts you can no longer manage. Once you’ve opted for this approach to wiping out debts, there are limits surrounding when you can file again. If you’ve used Chapter 7 bankruptcy specifically to discharge debts in the past, you must wait eight years before filing another Chapter 7 case.

That doesn’t mean you’re out of options if you’re facing debt again. Chapter 13 bankruptcy, often referred to as a wage earner’s plan, is another potential route to take, and you only have to wait four years to file after filing Chapter 7.

Jul Unfiled Tax Returns In Chapter 13

Tax returns can be a trap for the unwary in Chapter 13 bankruptcy. Often, bankruptcy debtors do not have their tax returns squared away and filed before filing for bankruptcy. When non-tax creditors are pursuing you, and you need quick relief, often tax returns are the last thing on your mind. However, the need to file recent tax returns is enshrined in the updates to the bankruptcy code that went into effect in 2005.

Section 1308 of the Bankruptcy Code provides:

Not later than the day before the date on which the meeting of the creditors is first scheduled to be held under section 341, if the debtor was required to file a tax return under applicable nonbankruptcy law, the debtor shall file with appropriate tax authorities all tax returns for all taxable periods ending during the 4-year period ending on the date of the filing of the petition.

This means that you must file all of your state and federal tax returns due within the past four years before your meeting of creditors. If you cant do this, however, the law provides some help. At her discretion, the bankruptcy trustee can hold open the meeting for a period not exceed 120 days. It is the job of your lawyer to request this if your tax returns are not filed as of the date of your meeting. If the returns are not filed, and the meeting is not held open, your case will be dismissed if someone asks the Court to dismiss it. The reason for this is Section 1307 of the Bankruptcy Code, which provides:

How To Beat The Irs: Dischargeability Of Taxes In Bankruptcy

How to Beat the IRS: Dischargeability of Taxes in Bankruptcy

With a few exceptions, the Bankruptcy Code adheres to the age-old rule that in life, only death and taxes are certain. It isnt so easy to beat the IRS because the Bankruptcy Code significantly limits a debtors ability to discharge taxes in bankruptcy. A bankruptcy professional has to have an intimate understanding of the Bankruptcy Code in order to know when you can beat the IRS and when you cant. Your starting point should be an understanding as to when a discharge of a tax is permitted.

Beating the IRS in bankruptcy court can sometimes feel like asking the San Diego Padres to beat the New York Yankees. The IRS has very low hurdles to clear in order to make a tax debt stick around. First, the IRS must show that the tax is of the kind that cant be discharged. The type of tax, the date the tax was assessed, the date it was due, whether it is a tax or penalty and other factors are all relevant. Second, the IRS must prove this only by a preponderance of the evidence, which is lawyer talk for maybe Im right, and maybe Im wrong. The IRS must also demonstrate that the claim is for either a tax or tax penalty. The Bankruptcy Code does not define what is a tax and just because Congress or a local legislature called it a tax does not necessarily mean it is a tax.

I. Priority and Gap Period Taxes: The Wait Three Years After Filing the Return or 240 Days After Being Assessed Rule.

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Debts Never Discharged In Bankruptcy

While the goal of both Chapter 7 and Chapter 13 bankruptcy is to put your debts behind you so that you can move on with your life, not all debts are eligible for discharge.

The U.S. Bankruptcy Code lists 19 different categories of debts that cannot be discharged in Chapter 7, Chapter 13, or Chapter 12 . While the specifics vary somewhat among the different chapters, the most common examples of non-dischargeable debts are:

  • Alimony and child support.
  • Certain unpaid taxes, such as tax liens. However, some federal, state, and local taxes may be eligible for discharge if they date back several years.
  • Debts for willful and malicious injury to another person or property. âWillful and maliciousâ here means deliberate and without just cause. In Chapter 13 bankruptcy, this applies only to injury to people debts for property damage may be discharged.
  • Debts for death or personal injury caused by the debtorâs operation of a motor vehicle while intoxicated from alcohol or impaired by other substances.
  • Debts that you failed to list in your bankruptcy filing.

Debts That Are Difficult To Discharge In Bankruptcy

Filing Bankruptcy Without a Lawyer: Can or Should You?

Student loans are notoriously difficult to discharge through bankruptcy it is only possible if you can demonstrate undue hardship to yourself or your dependents, such as being unable to maintain a minimal standard of living. In some cases, a court may discharge part, but not all, of your student loan debt. If student loan debt is a major reason for your considering bankruptcy, contact your loan servicer first and see if itâs possible to negotiate a repayment plan that would work for you. In the case of federal student loans, for example, several repayment plans are available.

You cannot have income tax debts discharged without a special exemption, which can only be obtained by petitioning the bankruptcy court and explaining why you deserve relief. So if you have income tax debts that you cannot repay, then you may be better off consulting with a tax attorney to discuss your options before filing for bankruptcy.

In the case of federal taxes, for example, the Internal Revenue Service can offer several alternatives to people who are unable to pay what they owe. One is an offer in compromise, in which the IRS agrees to accept a lesser amount. The IRS may also arrange for a payment plan, or an installment agreement, that will allow you to pay your taxes over an extended period of time.

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How Often Can You File For Bankruptcy

The frequency of applying for bankruptcy depends on which type of bankruptcy you’re filing, something known as the 2-4-6-8 rule. Here’s a breakdown:

  • Filing Chapter 13 after Chapter 13: two years.
  • Filing Chapter 13 after Chapter 7: four years.
  • Filing Chapter 7 after Chapter 13: six years.
  • Filing Chapter 7 after Chapter 7: eight years.

Filing Chapter 13 immediately after Chapter 7 is also referred to as Chapter 20 bankruptcy. You won’t receive a discharge when filing Chapter 20, since you aren’t waiting the full four years between Chapter 7 and Chapter 13, but this type of filing could give you the time you need to pay down debt.

How Soon Can You File For Chapter 13 After Chapter 7 Bankruptcy

In order to get debts discharged through Chapter 13, you must wait four years after filing a Chapter 7 bankruptcy.

You can file for Chapter 13 before four years if no debts were discharged in the Chapter 7 filing, but if you had debts discharged in Chapter 7 and want to have debts discharged in Chapter 13, you must wait four years.

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File Bankruptcy Before Receiving A Large Sum Of Money

Not a lot of people expect to come into money when considering bankruptcy. Whether entirely by chance, such as the untimely death of a relative and subsequent inheritance or expected, if someone receives a large sum of money within 180 days of the bankruptcy, that money is considered part of the estate. If you didnât see it coming, thereâs really nothing you can do about it. But if you know that youâre going to receive a large sum of money, you can try to time your bankruptcy around it or take the money and avoid bankruptcy. If youâre in this situation, speak to an attorney.

How To Qualify For Chapter 7

How to Get Tax Returns if Filing for Bankruptcy?
  • : You must have attended a credit counseling session 6 months prior to filing chapter 7 bankruptcy.
  • Means Test: You must qualify under the Chapter 7 bankruptcy Means Test. Under the Means Test, if your income is less than the median income of another family of the same size in your state, you qualify to file Chapter 7. Find out how Means Test determines if you qualify for chapter 7. Check out how Means Test determines if you qualify for chapter 7 or 13.
  • Prior bankruptcy: You have received a Chapter 7 bankruptcy discharge within the past 8 years or a Chapter 13 discharge within the past 6 years.
  • Bankruptcy dismissal: You have not had your bankruptcy dismissed within the past 6 months for failure to appear or contempt of court.

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Tax Returns And Chapter 13 Bankruptcy

You must be up to date on your tax returns before you file a Chapter 13 case, but the rules allow you a little wiggle room. You’ll provide copies of the returns for the previous four tax years to the Chapter 13 trustee before the 341 meeting of creditors . If you’re not required to file a return, your trustee might ask for a letter, an affidavit, or a certification explaining why. Sometimes local courts will impose additional rules for documents in their districts.

If you owe the IRS a return but don’t file it before your 341 meeting of creditors, things can happen to derail your case.

  • A motion. The trustee will file a motion giving you a very brief period to provide your returns. If you miss the deadline, the court can automatically dismiss your case, leaving you no chance to plead your case to the judge.
  • A substitute return. The IRS might file a “best estimate” claim based on your past income. The problem? IRS estimates are almost always higher than what you would owe after you file a proper return.

Contributing To Your Spouses Registered Retirement Savings Plan

Contributions you make to your spouses RRSP can be deducted from your taxable income. This is advantageous if you have a higher net income, which is taxed at a higher rate than your spouse. However, the contributions you make to a spouses RRSP reduce your own deduction limit. The total amount you can deduct for contributions you make to your RRSP or that of your spouse cannot be more than your own deduction limit. If you cannot contribute to your RRSP because of your age, you can still contribute to your spouses or common-law partners RRSP until the end of the year when your spouse or partner turns 71. For more on RRSP, please click here.

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What If Im Not Required To File Tax Returns Can I File Bankruptcy


If you are not required to file tax returns by law, then you do not need to supply tax returns to the trustee. Some trustees will ask for an affidavit stating that you are not required to file tax returns. You may not need to file returns if your only income is from social security, for example.

You should be certain that this is the case, however. Sometimes clients tell us that theyre not required to file tax returns when, in reality, they are required to file returns. This could be a problem.

If you work with a tax professional, you should consult that professional to determine whether you are required to file. If you do not work with a tax professional, good news. Attorney Best is also a tax attorney. We can work with our clients to determine whether you are required to file tax returns. Moreover, if you are required to file, but havent done so, we can file them for you!

One of the reasons people hire our office to file their bankruptcy is that its one stop shopping for bankruptcy and tax. We are even able to perform a tax dischargeability analysis!

What Are The Requirements For Tax Discharge

Tax Returns and Bankruptcy: Basic Facts that Can Help You ...

There are a number of pre-requisites that have to be met before you can solve your bankruptcy tax debt. In order to be cleared of all income tax debt , the following minimum requirements have to be met:

  • 3 years need to have passed since your returns were last due to be filedthis includes any extensions that you may have received.
  • The returns were filed in a timely manner or its been at least 2 years since the returns were filed.
  • There was no fraud or attempts to avoid and evade paying the IRS .
  • The taxes havent been assessed in the last 240 days.

Sometimes, there are occasional exceptions and ways to get around the above requirements. You shouldnt give up on filing for bankruptcy to absolve yourself of tax debt until you have a qualified professional take a look at your files first. Even if you cant completely get rid of your tax debt through bankruptcy, you may be able to get a partial tax bankruptcy discharge for some of itand set up a payment plan for the rest.

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Bankruptcy In The United States

Like the economy, bankruptcy filings in the U.S. rise and fall. In fact, they are like dance partners where one goes, the other usually follows.

Bankruptcy peaked with just more than two million filings in 2005. That is the same year the Bankruptcy Abuse Prevention and Consumer Protection Act was passed. That law was meant to stem the tide of consumers and businesses too eager to simply walk away from their debts.

The number of filings dropped 70% in 2006, but then the Great Recession brought the economy to its knees and bankruptcy filings spiked to 1.6 million in 2010. They retreated again as the economy improved, but the COVID-19 pandemic easily could reverse the trend in 2021. It seems inevitable that many individuals and small businesses will declare bankruptcy.

Bankruptcy Is A Powerful Tool For Debtors But Some Kinds Of Debts Can’t Be Wiped Out In Bankruptcy

By Cara O’Neill, Attorney

If you’re facing severe debt problems, filing for bankruptcy can be a powerful remedy. It stops most collection actions, including telephone calls, wage garnishments, and lawsuits . It also eliminates many types of debt, including credit card balances, medical bills, personal loans, and more.

But it doesn’t stop all creditors, and it doesn’t wipe out all obligations. For instance, you’ll still have to pay your student loans and arrearages for child support, alimony, and most tax debts. Read on to learn more about:

  • what you can expect in both Chapter 7 and Chapter 13
  • the benefits offered by Chapter 13 alone, and
  • things that can’t be accomplished by filing for bankruptcy.

If you’d like step-by-step guidance through the bankruptcy process, read What You Need to Know to File for Bankruptcy in 2021.

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What If I Havent Filed My Tax Returns For Multiple Years Can I File Bankruptcy

Yes! We can help you file bankruptcy even if your taxes arent done.

Sometimes, when someone owes money to the IRS, they decide not to file the tax return. The next year, they dont file because they didnt file the last year. This can repeat year after year until it becomes overwhelming. Where do I start? How do I fix this? What about the penalties?

We prepare delinquent tax returns for our clients all the time. Because we are also tax lawyers, we are able to obtain a tax account transcript as well as a wage & income transcript from the IRS. This tax transcript analysis allows us to determine everything we need to know about your tax situation. We can prepare your returns and advise you on what to do next. Sometimes were able to reduce or eliminate tax penalties.

Finally, were able to perform a tax dischargeability analysis to let you know what taxes are dischargeable in bankruptcy. If the bankruptcy will not discharge your taxes, we would advise you as to other options such as an Offer in Compromise or Installment Agreement.

Bankruptcy Without Tax Returns

Can I File Bankruptcy If I Haven’t Filed My Tax Returns?

Bankruptcy and tax returns

You can file a bankruptcy without tax returns but if you have unfiled tax returns it may be in your best interest to file them before you file as opposed to right after you file for bankruptcy. It is in you best interest to have your tax returns filed prior to the filing of your case. This is especially if you are looking at filing a Chapter 13 bankruptcy. You want to know how much tax you will be required to pay on during a repayment plan that you will be proposing to the bankruptcy court. With out a firm number on the amount of outstanding tax debt you owe the court will not approve your proposed bankruptcy plan. Your bankruptcy in a Chapter 13 will not be approved unless you have your tax return filed. To decide if you should file your tax returns or file for bankruptcy first, remember that in order to know how your taxes, penalties, and interests will be treated your tax returns have to be prepared.

In a Chapter 7 bankruptcy case you will need to know what your possible tax refund might be prior to the filing of the case so it usually a good idea to file your tax returns prior to the filing of a case. In most cases tax debt survives the filing of a bankruptcy so any taxes you owe will still be owed even if you file for bankruptcy. But as I said the refund is different.

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