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25

Jan 2014

Before bankruptcy: Getting your tax account transcripts

Posted by / in Before Bankruptcy /

Most income taxes cannot be discharged in bankruptcy, but some can.

To find out whether yours can, your lawyer will need your tax account transcript.  The IRS makes these available now on line.  You can download yours here.

tax account transcript

To find out whether your Federal income taxes can be discharged in bankruptcy, your lawyer will need to see your tax account transcript.

Why do you need that?  Your lawyer can use your account transcript to see if your taxes were filed, if they were filed close to on time, and if there was a recent assessment.

Here’s why:  The general rule is this:  You can discharge your Federal and state income taxes if:

1.  They were due more than three years ago.  (Example, the 2010 Federal taxes were due  for most people April 15, 2011–if you didn’t get an extension.  So April 16 2014 is more than three years after the 2010 Federal taxes were due.)

2.  You have filed them at least two years ago and close to on time.  (What does “close to on time” mean?  I’m not answering that here.  I’m NOT an expert on that.)

3.  Your taxes have to have been assessed at least 240 days ago.  Usually the taxes are assessed around the time you filed.  But if there was a recent audit or correction to your tax forms, you have to watch out for this rule.

Do you want to know more about this rule?  Nolo has several posts on this topic.  Here’s an article in the Journal of Accountancy.  Here’s some info from Fox Business.

WHATEVER you do, do not take legal action–like filing your own bankruptcy–based on what I say here.  The purpose of this blog is ONLY to tell you where to go to get your transcript.  You can get your tax account transcript from the IRS here.

If you are getting your transcript for this purpose, be careful to get the tax account transcript and NOT the tax return transcript.  The tax return transcript does NOT give the info you need.  The tax account transcript does.

 

 

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Robert Weed has helped twelve thousand people file bankruptcy in Northern Virginia. Robert Weed is a frequent panelist and speaker at the meetings of the National Association of Consumer Bankruptcy Attorneys. He is one of Northern Virginia’s most experienced personal bankruptcy lawyers. As an expert on changing consumer bankruptcy laws, Robert Weed has been interviewed on local and national TV and quoted in newspapers across the country.

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