I haven’t filed my taxes in years. How will this affect my bankruptcy?

We can file a bankruptcy case for you even if you have years of unfiled taxes, but it creates a number of problems.

In a chapter 7, we file the case and then meet with the bankruptcy trustee one month later.  If you haven’t filed your taxes for the previous year, he will order you to file your taxes and get him a copy of those taxes within the next two weeks.  This means that if you are behind on your tax filings, you’ll have to file last year’s taxes within 45 days of filing bankruptcy.

If you are entitled to a refund, the trustee will take it.  If you haven’t filed for a number of years, the trustee may or may not order you to file the previous years’ returns.  If there are any refunds coming, he’ll take those too.

If you owe taxes from those years, it doesn’t matter to the chapter 7 trustee.  Just remember that unfiled taxes cannot be discharged in bankruptcy.

In a chapter 13, it’s worse.  You cannot get your chapter 13 plan confirmed unless you have filed all of your missing returns.  If you owe any back taxes, you will have to pay those back as part of your chapter 13 bankruptcy.  It is generally a good idea to get your back taxes filed first before you go bankrupt, but if you have something like a foreclosure sale pending,  then you file the bankruptcy first and worry about the taxes after.

This is not legal advice.  If you need help go to www.robertspaynelaw.com.


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