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Massachusetts Debtors Discharging Taxes in Personal Bankruptcy

Many of our Boston bankruptcy clients have outstanding tax liabilities in addition to credit card debt, motor vehicle and mortgage debt. Most have not heard that there are legal ways to discharge taxes. The general rule is that more than two years since the tax return was due, including extensions, taxes can be discharged in bankruptcy. Of course, when dealing with the Internal Revenue Service and the United States Bankruptcy Code, it is complicated and you should have a lawyer. And your taxes should be filed by a CPA if there are any complications. In particular, it is important that there was no fraud or other criminal activity.

The goal in Chapter 7 Personal bankruptcy is to get a fresh start. Discharging taxes is not materially different from discharging debts to credit card companies, and the Bankruptcy Code makes provision for it. Again, we would highly recommend you seek legal and accounting assistance before assuming your tax liabilities are dischargable.