Many taxpayers think Bankruptcy is their Tax Debt salvation, a literal Get out of Tax Debt Free Card! Hate to break it to you, but that's a myth!
Even if you do qualify to get your Tax Debt discharged, it rarely means the debt is gone for good!
You're not off the hook: Tax Debt can be included in bankruptcy, but it's difficult. The following Three IRS Bankruptcy Rules usually prevent your debt from being discharged.
1. The 3 Year Rule: You cannot discharge tax debt that's older than 3 years old, the first painful disqualifier!
2. Interest and Penalties Don't Quit: Your account will be placed on hold while you try to discharged it. This mean you don't receive collection actions, but interest and penalties continue to accrue! If you're unlucky, your tax debt may return bigger and badder than even if your Tax Debt isn't charged.
3. More Time to Collect: That hold the IRS placed your account under is a blessing and a curse. Like I said, you won't get collection actions, but the IRS will extend the amount of time they have to collect on your back taxes!
So, about those alternatives... As you can see, Bankruptcy is simply not the ideal option for discharging your tax debt. But when you really can't pay, there are options available for you that will keep the IRS off your back without the negatives that come with Bankrtupcy.
I highly recommend working with a professional to find the right plan for you. If you need help, feel free fill out the form on the right/give me a call at 1-888-415-1337 and we'll find the right plan for you!