Using Bankruptcy as a Tax-Debt Solution Requires Careful Attention

In some situations involving Internal Revenue Service (IRS) tax problems, bankruptcy may be the best option for a taxpayer. The purpose of a bankruptcy proceeding is twofold. First, bankruptcy is designed to give eligible parties a fresh start by helping them to move on from their debts. In addition, bankruptcy is designed to fairly distribute assets to the individual’s creditors. Bankruptcy can be a solution for IRS tax debt in some cases. It is important, however, to be aware of all of the rules and requirements, or problems can arise.

Keep Your Eye on the Details

 If you are considering bankruptcy as an alternative solution to your tax problem, it is strongly recommended that you consult with an experienced attorney. Why? Using bankruptcy as a tax solution requires knowledge of all of the requirements that must be fulfilled in order to be eligible. There are certain criteria, for example, that most are aware of. There are also smaller issues that you must address, including the following:

  • You must prove that you filed each of your last four tax returns with the IRS.
  • You must prove that you filed these four previous tax returns no later than the date of your first creditors’ meeting in your bankruptcy case.
  • You must provide the bankruptcy court with a copy of your most recent tax return. It is important to note that any of your creditors may also request a copy of this return. If they do, you are required to provide it to them.


Failing to fulfill the above requirements can result in problems with your bankruptcy filing.

Fortunately for taxpayers, you do not have to navigate this process alone. We are here to help! We encourage you to reach out—send us an email or contact us using our live chat at any time.


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