If you owe past due federal taxes that you cannot pay, bankruptcy may be an option. Other options include an IRS payment plan or an offer in compromise.
For individuals, the most common type of bankruptcy is a Chapter 13. Before you consider filing a Chapter 13 here are some things you should know:
- You must file all required tax returns for tax periods ending within four years of your bankruptcy filing.
- During your bankruptcy you must continue to file, or get an extension of time to file, all required returns.
- During your bankruptcy case you should pay all current taxes as they come due.
- Failure to file returns and/or pay current taxes during your bankruptcy may result in your case being dismissed.
Partnerships and corporations file bankruptcy under Chapter 7 or Chapter 11 of the bankruptcy code. Individuals may also file under Chapter 7 or Chapter 11. For additional tax information on bankruptcy, refer to Publication 908, Bankruptcy Tax Guide and Publication 5082, What You Should Know about Chapter 13 Bankruptcy and Delinquent Returns PDF.
Other types of bankruptcy include Chapters 9, 12 and 15. Cases under these chapters of the bankruptcy code involve municipalities, family farmers and fisherman, and international cases. For information see Other types of bankruptcy – Chapters 9, 12 & 15.
If you filed for bankruptcy
Here are some next steps if you already filed.
Get answers to bankruptcy frequently asked questions.
How can I notify the IRS that I've filed bankruptcy?
If you listed the IRS as a creditor in your bankruptcy, the IRS will receive electronic notice about your case from the U.S. Bankruptcy Courts within a day or two of the petition date. If you're not sure if we received notice, call the Centralized Insolvency Operation at 800-973-0424 and give them your bankruptcy case number.
How can I find out about my refund when I'm in bankruptcy?
Call 800-973-0424 with your bankruptcy case number and ask to be referred to a bankruptcy specialist.
What if I don't know my bankruptcy case number?
Call 866-222-8029 – at the U.S. Bankruptcy Courts and follow the prompts.
For our firm, we specifically handle Chapter 7 Bankruptcy cases. Below are the effects of bankruptcy on taxes for Chapter 7 Bankruptcy.
