Considering Bankruptcy and Haven’t Filed Taxes?
Properly filing your taxes is an important part of making sure that your bankruptcy case goes smoothly. Failure to file taxes can end in the dismissal of your bankruptcy case, not to mention a waste of your time, money and energy.
Here’s what you need to know:
- If you have not filed taxes for the past few years, you will not be able to file bankruptcy without doing so first. If you’re filing Chapter 7 bankruptcy , the bankruptcy court will usually request tax documents for at least the past two years; but they could request more. If you haven’t filed taxes for two or more years expect to have the IRS submitting a claim for payment when you do file bankruptcy. As a matter of fact, they probably have already made a tax assessment against you. However, having a tax assessment is not the same as having a tax return. The bankruptcy court demands a tax return if you want to file bankruptcy.
- If you’re filing for Chapter 13 bankruptcy , you will need to provide tax returns for the past four years. Once again, if you failed to file taxes do so now so that you can avoid problems with your bankruptcy case.
- If you are unable to pay your taxes, do not allow that to stop you from filing a tax return. The bankruptcy court does not require you to pay the taxes in order to satisfy the requirement of submitting your tax return.
- Finally, be prepared to repay taxes in bankruptcy especially if you did not file the tax return on time. The bankruptcy court will not discharge taxes for tax returns which are filed right before you submit the bankruptcy petition. This means that you can’t discharge taxes for 2008 if you just filed the tax return in 2011.