Do You Still Need to File Taxes if You Declare Bankruptcy?

The short answer is yes, you should still file your income tax return even if you’re considering filing for bankruptcy in Alabama or already have. Although bankruptcy may help you avoid litigation and alleviate you from having to satisfy some tax debts given they meet Internal Revenue Service (IRS) criteria, it doesn’t serve as an excuse to not file your taxes.

Each year, regardless of your financial situation, you are required to file your taxes. You must report the income you earned and satisfy any outstanding tax liabilities by the IRS deadline. Under certain circumstances, if you failed to file your taxes and file for bankruptcy, the court may use this as a reason to dismiss your case.

What if I can’t pay my taxes and want to file for bankruptcy?

If you know you’re liable for paying money to the IRS, this shouldn’t stop you from filing your taxes. But, if you’d like more time to submit your return, you can always request an extension from the IRS. Of course, you’ll want to request the extension prior to the filing deadline, which usually falls somewhere around April 15.

Now, if you know you aren’t going to be able to pay taxes owed, the IRS will sometimes offer a payment plan which lets you break up the amount owed into monthly payments. If you’re behind on your taxes, the IRS also might allow you to settle the debt via a compromise (1).

Will the IRS be notified if I file for bankruptcy?

If you owe the IRS money and list them as a creditor when you file your bankruptcy petition, the agency says it will receive an electronic notification regarding your case from the U.S. Bankruptcy Courts (2). This notice is usually sent within a day or two of your petition date, according to the IRS.

Don’t let your taxes stand in the way of you obtaining bankruptcy protection.

If you’d like to file for bankruptcy but are worried your lack of filing taxes might stand in the way, contact a Springville, AL bankruptcy lawyer today to find out if your concern is valid. The timeframe in which you haven’t filed coupled with the amount owed can be used to determine whether you can file for bankruptcy now or if you need to take a few additional steps before you submit your petition.

The Springville, AL bankruptcy lawyers at Hill, Gossett, Kemp & Hufford, P.C. are here to help you make an informed decision when it comes to bankruptcy and determine if it’s a suitable solution for you. Contact Hill, Gossett, Kemp & Hufford, P.C. today to set up a time to speak with an Alabama bankruptcy lawyer nearest you.

Have questions about this article or a legal concern? Call 800-672-3103.

Disclaimer: No representation is made that quality of legal services provided is greater than the quality of legal services provided by other attorneys.

Hill, Gossett, Kemp & Hufford, P.C. can be reached at:

Moody Office

2603 Moody Parkway, Suite 200

Moody, Alabama 35004

Phone: (205) 640-2000

Website: www.hwhlawgroup.com

Leeds Office

7900 Parkway Drive

Leeds, AL 35094

Phone: (205) 699-5500

Springville Office

6441 U.S. Highway 11