Can You Discharge IRS Tax Debt Through Bankruptcy in Florida?

Dealing with IRS tax debt can feel overwhelming, especially when it continues to grow due to penalties and interest. If you live in Miami-Dade County and are struggling with unpaid taxes, you might wonder whether bankruptcy can offer a solution. At Bankruptcy Lawyers Miami, we assist individuals throughout the Miami area with navigating options for debt relief, including whether their tax debts can be discharged.

Understanding Tax Debt and Bankruptcy

Bankruptcy is a legal process that helps individuals eliminate or restructure their debts. However, not all debts are treated equally. Some debts are classified as “nondischargeable,” meaning they typically cannot be wiped out through bankruptcy. Tax debts often fall into a complex category, and whether they can be discharged depends on several factors.

When Is IRS Tax Debt Dischargeable?

In Florida, IRS tax debt can sometimes be discharged if certain conditions are met:

• Three-Year Rule: The tax return for the debt must have been due at least three years before you file for bankruptcy.
• Two-Year Rule: You must have filed a legitimate tax return at least two years before filing for bankruptcy.
• 240-Day Rule: The IRS must have assessed the tax at least 240 days before your bankruptcy filing.
• No Fraud or Willful Evasion: If the IRS proves that you attempted to evade paying taxes or filed a fraudulent return, the debt cannot be discharged.
• Income Taxes Only: Only income tax debts may be eligible for discharge. Other types of taxes, like payroll taxes or fraud penalties, usually are not dischargeable.

If all these requirements are satisfied, your income tax debts may be eligible for discharge through a Chapter 7 or Chapter 13 bankruptcy.

Chapter 7 vs. Chapter 13 Bankruptcy and Tax Debt

• Chapter 7 Bankruptcy: This option can completely eliminate eligible tax debts if you meet the requirements above. It is typically faster and often involves liquidation of nonexempt assets.
• Chapter 13 Bankruptcy: If your tax debt does not meet discharge rules, Chapter 13 may allow you to create a repayment plan spanning three to five years, giving you a manageable way to handle IRS obligations.

How Bankruptcy Lawyers Miami Can Help

Navigating IRS rules, bankruptcy laws, and court procedures can be complicated. At Bankruptcy Lawyers Miami, we provide personalized guidance to residents of Miami-Dade County. We analyze your tax records, bankruptcy eligibility, and financial situation to create a strategy that protects your future.

You do not have to face tax debt alone. Our team is here to help you understand your options and pursue the financial relief you deserve.