Bankruptcy Timing for Tax Debt Relief Is Impacted by Offers in Compromise

If you are facing a tax debt that you fear you may be unable to pay, there are several potential solutions you may want to consider. One such potential solution is to file for bankruptcy. For certain eligible taxpayers, bankruptcy can be a viable way of resolving your IRS tax problem. It is important to note, however, that requesting an Offer in Compromise during this process can impact your eligibility for bankruptcy.

How an Offer in Compromise Can Affect Bankruptcy Proceedings as Tax Debt Relief

In order to qualify to utilize bankruptcy as a solution to your tax problem, there are several criteria that must first be met. Many of these criteria pertain to filing times and other issues relating to dates.

One such criterion involves the date on which the IRS assessed your tax debt. The IRS must have assessed your tax debt at least 240 days prior to the start of your bankruptcy filing. These assessments arise as a result of the filing of a tax return. Requesting an Offer in Compromise can impact that 240-day window. If during the 240-day collection period you requested an Offer in Compromise, an additional 30 days is added to the remainder of the 240-day collection period after the offer is no longer pending. This is very important to keep in mind since an Offer in Compromise is often requested by taxpayers looking for alternative solutions to their IRS tax problems.

Help Is Available

Dealing with a tax problem with the IRS is often a stressful process. When you are considering bankruptcy as part of the situation, it can be even more difficult to deal with if you do not have significant experience dealing with highly complex tax and bankruptcy laws. Fortunately, you do not have to navigate this process alone. We have helped countless clients successfully resolve their tax problems. We encourage you to hear directly from them by reviewing our many client testimonials today.


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