Westall, Gray & Connolly, P.A. | firstname.lastname@example.org | 828-254-6315
For some people who are in financial trouble, tax debt is one of their primary concerns. In North Carolina, this typically means that you owe the IRS or the North Carolina Department of Revenue (the “NCDOR”) for unfiled or unpaid taxes.
If you owe the IRS, the North Carolina Department of Revenue, or any other taxing authority money, filing for bankruptcy may be a way to successfully manage payments of those debts. Determining how a tax claim will be treated in bankruptcy depends on a number of factors – when the tax debt was assessed, when/if you filed a tax return, whether the IRS assisted you with filing a return, the type of tax, and whether or not the taxing authority filed a tax lien on your property. It is important to note that income tax debt is not final until a tax return or statement is filed. It is very difficult to obtain bankruptcy relief for tax obligations that have not been finalized.
Some tax debts can be discharged (eliminated) in bankruptcy, which means that the taxing authority (the IRS or the NCDOR) will no longer legally be able to collect money owed on those debts. Other debts are non-dischargeable. If a tax debt is non-dischargeable, that means that even if you file bankruptcy, you will still be liable for the tax owed. So, in some cases, you may receive a discharge on other debts and still be liable for your tax debts.
If you live in Asheville or Western North Carolina and you have questions about how your tax debts may be handled in a bankruptcy proceeding, contact our office for a consultation (828) 254-6315.