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Video instructions and help with filling out and completing How Form 843 Bankruptcy

Instructions and Help about How Form 843 Bankruptcy

P>It's from Megan from Fort Myers. How does owing the IRS money affect bankruptcy? Is it dischargeable or non-dischargeable? Can you still get audited? Do you have to give your tax refunds to your creditors? There's a lot of information to cover here, so let's start from the beginning. When dealing with the IRS in bankruptcy, the first question to ask is whether it's a chapter 7 or chapter 13 bankruptcy. Next, you need to consider how old the debt is, whether your tax returns were filed on time, if they were reviewed by the IRS, and the amount of the debt. Additionally, there are 940 forms to consider. Generally, people think that taxes are non-dischargeable in bankruptcy, but I disagree with that rule. Certain taxes can be discharged in bankruptcy if the debt meets specific criteria, such as its age and the proper filing of tax returns. When a debt loses its priority status and becomes unsecured, it can be discharged, similar to a personal loan or credit card debt. This includes IRS debts that meet these criteria. So, how does owing the IRS money affect your bankruptcy filing? IRS debts are not excluded from bankruptcy and must be included. All debts are included in bankruptcy, although some may be non-dischargeable, such as student loans or recent IRS taxes. When determining the best approach, we consider your specific situation. You may qualify for a chapter 7, wiping out the debt entirely, or we may suggest a chapter 7 followed by a chapter 13 to pay off the IRS debt without interest or penalties. In this case, the second bankruptcy doesn't result in a discharge, but it allows you to utilize the bankruptcy process to repay the IRS comfortably under court supervision. Now, let's address Megan's question about being audited during bankruptcy....