If you owe past due federal taxes that you cannot pay, bankruptcy may be an option. Other options include an IRS payment plan or an offer in compromise.
For individuals, the most common type of bankruptcy is a Chapter 13. Before you consider filing a Chapter 13 here are some things you should know:
Partnerships and corporations file bankruptcy under Chapter 7 or Chapter 11 of the bankruptcy code. Individuals may also file under Chapter 7 or Chapter 11. For additional tax information on bankruptcy, refer to Publication 908, Bankruptcy Tax Guide and Publication 5082, What You Should Know about Chapter 13 Bankruptcy and Delinquent Returns PDF .
Other types of bankruptcy include Chapters 9, 12 and 15. Cases under these chapters of the bankruptcy code involve municipalities, family farmers and fisherman, and international cases. For information see Other Types of Bankruptcy – Chapters 9, 12 & 15.
Here are some next steps if you already filed.
If you listed the IRS as a creditor in your bankruptcy, the IRS will receive electronic notice about your case from the U.S. Bankruptcy Courts within a day or two of the petition date. If you're not sure if we received notice, call the Centralized Insolvency Operation at 800-973-0424 and give them your bankruptcy case number.
Call 800-973-0424 with your bankruptcy case number and ask to be referred to a bankruptcy specialist.
Call 866-222-8029 – at the U.S. Bankruptcy Courts and follow the prompts.
Debtor must file returns for the last four tax periods.
Dismissal: IRS may keep payments, and time in bankruptcy extends time to collect remaining tax liabilities.
Discharge: Will eliminate (discharge) personal liability for tax debts older than three years unless returns filed late. Businesses don't receive a discharge since they're liquidated.
Debtor must file returns for the last four tax periods.
Dismissal: IRS may keep payments, and time in bankruptcy extends time to collect remaining tax liabilities.
Discharge: Will eliminate (discharge) tax debts paid in the plan and tax debts older than three years unless returns filed late.
Debtor must file returns for the last four tax periods.
Dismissal: IRS may keep payments, and time in bankruptcy extends time to collect remaining tax liabilities.
Discharge: Will eliminate (discharge) tax debts paid in the plan and tax debts older than three years unless returns filed late. For businesses with employees, will not eliminate (discharge) unpaid employee Social Security and income tax withheld.
Debtor must file returns for the last four tax periods.
Dismissal: IRS may keep payments, and time in bankruptcy extends time to collect remaining tax liabilities.
Discharge: Will eliminate (discharge) tax debts paid in the plan and tax debts older than three years unless returns filed late. For businesses with employees, will not eliminate (discharge) unpaid employee Social Security and income tax withheld.