Income Tax And Bankruptcy

read over materials about asset protection from income tax debt which had been published by Larry Heinkel www.taxproblemsolver.com. . Larry is an expert in the area of income tax debt in bankruptcy. His article pointed out some common misunderstandings about tax debts. First, Florida’s homestead law does not protect homeowners from income taxes. A tax lien attaches to your homestead unlike a civil judgment. Next, Florida’s statutes prohibiting creditors from garnishing wages of the head of household does not protect against IRS collections. Also, a divorce decree which specifies which spouse is responsible to pay tax liability is not binding on the IRS. The IRS can go after either divorced spouse for the full amount of tax debt.

Discharging tax debt in bankruptcy is complicated. The general rule is that Chapter 7 bankruptcy can discharge taxes for which the tax return was due to be filed more than three years prior to the bankruptcy. The "due date" is April 15 following the tax year plus extensions. Larry Heinkel points out that there are many events which can extend the due date for purposes of bankruptcy analysis. Also, tax returns first filed within two years of bankruptcy or taxes assessed within 240 days of bankruptcy cannot be wiped out. Taxes in bankruptcy is a very complicated area which is why Mr. Heinkel’s services are in demand. Make sure your bankruptcy attorney really understands the income tax rules.

posted by Jonathan Alper, bankruptcy and asset protection attorney, Orlando, Florida