
Filing taxes is just about one of the least enjoyable parts of every new year. From the minute you start getting your W2’s in the mail, to the moment you put together all of your documents so tax preparation can begin, the thought of having to fork over a chunk of your money to Uncle Sam hangs out in the back of your mind. And, if you are low on funds, the idea that you have worked all year and paid into the system only to have to pay more now can cause quite a bit of frustration and anxiety. So, it should come as no surprise that filing taxes is one of the most common things that gets put on the back burner. But failing to file taxes comes with its own set of headaches; usually in the form of fines, penalties, and late fees. If you owe taxes, and also have other significant debt, you may be considering filing for bankruptcy. You might also be wondering if you will even be allowed to file a bankruptcy case if you have not yet filed your taxes.
It is a good question, to want to know if you can file bankruptcy without first filing taxes. Here is how it works:
● When a bankruptcy case is filed, the Trustee will ask to see copies of the past few years of your tax returns. If you have not filed taxes, you will not have these documents to provide to the Trustee, and this can create delays in your case.
● You will probably be given a timeframe within your bankruptcy to file your taxes, and the Trustee will likely ask that you simply prepare the returns and give them to the attorney for the IRS or local state taxing authorities for filing. This will expedite the filing of your returns, and allow the bankruptcy court to learn of any tax liability faster.
If you owe taxes, the sooner you take care of preparing the returns and getting them to the right attorney, the faster your bankruptcy case can come to a resolution. You may or may not be able to discharge the tax debt, but until the returns are prepared you will not be able to try and resolve that issue. If you are due a refund, it is possible the Trustee will claim that refund within your bankruptcy case, and distribute it to your creditors. In either instance you will need to get your returns prepared, so the amount due or any refund owed can be handled accordingly in your bankruptcy. For more information about taxes and bankruptcy, call our office to speak with one of our knowledgeable legal professionals today.
For more information about bankruptcy and taxes, contact us at www.DsouzaLegalGroup.com.