Eliminate Your Tax Debts

You often see in TV commercials offering you the hope of eliminating your tax debts. But you need to remember that this might not be as simple as it seems because in most cases, the tax debts in bankruptcy can not be eliminated. You will have to bear then till the end of the chapter 7 bankruptcy case or you might have to repay the full tax debts under the chapter 13 plan. So, here chapter 7 bankruptcy program will be the best option for you if you really want to get rid off the tax debt. But for that, you must qualify under the chapter 7 eligibility test.

Now you have to know when you can wipe out your debt of federal income tax according to chapter 7. And the following are the conditions whom you need to fulfill:

1. The taxes must be Income tax: All those taxes which are not income tax, can not be eliminated. Such as Fraud Penalties and payroll taxes can not be eliminated.

2. You must have filed a tax return two years ago: To eliminate the debt for which you have filed, has to be filed at least two years ago.

3. Your tax debt should be at least three years old: Your tax return must be due for at least three years old when you are filling for a bankruptcy to wipe out your tax debt.

4. You got to make sure that you have not engaged in any fraudulent case: If you have tried to evade tax payment or you had filed a fraudulent tax return then you can’t be helped due to such fraudulent attempts.

5. You must be qualified in the 240 Day Rule: The income tax credit has to be assessed at least 240 days before filing your bankruptcy petition by the IRS, or have not yet been evaluated.
Though this limit of time can be expanded by the IRS in some cases.