As the economy continues to falter, more and more people are turning to bankruptcy professionals to resolve their debt problems. A large part of consumer and corporate debt may include income tax liabilities.
Discharging taxes is a tricky business, and even seasoned bankruptcy lawyers experience difficulty accurately determining whether a client’s tax debts qualify for a bankruptcy discharge. With the passage of the Bankruptcy Abuse Prevention & Consumer Protection Act of 2005, also known as BAPCPA, and the watering down of the Chapter 13 “super-discharge,” it has become more difficult for a debtor to discharge taxes in bankruptcy. In fact, the discharge provisions for taxes found in Chapters 11 and 13 mirror those found in a Chapter 7 discharge.
