• Our Guarantee to Our Clients

    We promise to represent your best interests and keep you fully informed.

    Read Our Guarantee
  • Bankruptcy eBook

    Get a FREE eBook to become more familiar with the bankruptcy process.

    Download It Here
  • Our Video Center

    Click here to access a list of our firm's videos.

    Get More Information
  • When You're Ready To Talk

    We're ready to listen. Contact us to receive a free initial consultation.

    Request a Consultation

Bankruptcy and Past Due Tax Filings

One reason some people may consider filing bankruptcy is because they owe taxes. While it is generally accepted as fact that taxes are not dischargeable debt but, in some cases, they may be eligible. Specifically, taxes which are not considered payroll taxes owed may be discharged if they were charged to a taxpayer at least three years ago. This is one of the many reasons it is so important to file your taxes on time, even if you owe money you cannot pay.

Financial Dangers of Unfiled Tax Returns

Taxpayers should also be aware of what happens when they file for bankruptcy and have unfiled taxes. This is not a "pretty" process — to file for bankruptcy, you must file a Statement of Financial Affairs for Individuals Filing for Bankruptcy. This form includes declaring your income for the prior two years. Without having filed a tax return, you may not know what amount of income was reported to the Internal Revenue Service.

Possible IRS Actions After Filing

When a taxpayer has unfiled taxes and files for bankruptcy protection, the IRS may look back and when you filed your last tax return. If you have failed to file any returns, the IRS may file a return on your behalf. These returns are known as a substitute returnand you may receive a CP2566 Notice from the IRS telling you how much money you owe them. This amount may not be included as a debt which may be discharged under Chapter 7 bankruptcy because it is not more than three years old. It may however be paid off over the life of your Chapter 13 repayment plan.

Once you have filed for bankruptcy protection, you must file your tax returns on time or you could risk having your case thrown out of court or fail to secure a discharge. Contact the Law Offices of James C. Shields, a Torrance bankruptcy law firm today by fill out our online free case evaluation form or by telephone at (888) 910-6652 if you are considering a bankruptcy filing and let us help.

  • Our Guarantee to Our Clients

    We promise to represent your best interests and keep you fully informed.

    Read Our Guarantee
  • Bankruptcy eBook

    Get a FREE eBook to become more familiar with the bankruptcy process.

    Download It Here
  • Our Video Center

    Click here to access a list of our firm's videos.

    Get More Information
  • When You're Ready To Talk

    We're ready to listen. Contact us to receive a free initial consultation.

    Request a Consultation

When You're

Ready to talk

Our firm is ready to listen. Call for a FREE case consultation.

Call Toll-Free 888.910.6652

"The Law Offices of James C. Shields is located in Torrance and proudly serves clients all throughout the South Bay including:

  • Long Beach
  • Carson
  • Irvine
  • Los Angeles
  • Palos Verdes Estates
  • Huntington Beach
  • Hermosa Beach
  • Redondo Beach
  • Manhattan Beach
  • Newport Beach
  • Costa Mesa
  • El Segundo
  • Rolling Hills
  • Hawthorne
  • Playa Del Rey and Culver City
Law Offices of James C. Shields - Torrance Bankruptcy & Estate Planning Attorney
Located at 21707 Hawthorne Blvd, Suite 204
Torrance, CA 90503.
View Map
Phone: (888) 910-6652
Local Phone: (310) 626-4404

Website:
© 2019 All Rights Reserved.