In some instances, tax liabilities can be discharged by filing bankruptcy. There are two main types of bankruptcy available (Chapter 7 and Chapter 13), each with definitive and complicated rules regarding discharging tax liabilities. In both instances, the following must be true:
The IRS has a legal time period of 10 years to collect on a tax debt. This time period begins on the date the tax is assessed and the statutory required notice letter is sent. If the collection statute date runs out, there’s a chance that your tax debt becomes null and void. However, Statute of Limitations of IRS debt can be drawn out in many situations. You should always double check, and never assume, that your debt has been removed due to the 10 year statute of limitations.
If you have questions regarding your tax liability, give us a call. Our team of experienced, trusted tax advisors will help you get the best possible outcome.
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