Open season for shooting down old tax debts

huntingWith April 15th of 2014 in the rear view mirror, it is now open season on discharging 2010 income tax debts (both state and federal) in bankruptcy court.

Income taxes may not be usually dischargeable in bankruptcy, but the rules change once the debts get old. Debtors who filed a return on time, but who ended up owing money they couldn’t pay anyway, can eliminate the tax debt once three years have passed from the day the return was due.

So 2010 taxes were due on April 15th of 2011, and three years later, we have reached the point where the 2010 tax bills may be cashiered with a simple Chapter 7 bankruptcy case.

by Doug Beaton

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