Tax Implications: IRS Tax Relief

What this means to you is that under the current code certain IRS 1040 taxes may be dischargeable in bankruptcy. 1040 (income) taxes ARE DISCHARGEABLE if they meet a 3 prong test:

• The taxes were due including any extensions at least three years ago. For instance, 2006 taxes were due on April 15, 2007 and no extensions were filed, the taxes were due more than three years ago and were dischargeable April 16, 2010

• The tax return must have been on file for at least two years. You must have signed and filed a return.

• The taxes were assessed by the IRS at least 240 days ago

Employer taxes(941 and 940 taxes) are not dischargeable in bankruptcy under any circumstances. Sales Taxes are often also nondischargeable.