Can I keep certain types of tax debts when filing for bankruptcy?

Yes, you can keep certain types of tax debts when filing for bankruptcy in Utah. The federal Bankruptcy Code allows some types of tax debts to be discharged (eliminated) through a bankruptcy proceeding. In Utah, the Bankruptcy Court holds complete jurisdiction over tax debts, meaning all determinations are ultimately made by the Bankruptcy Court. Tax debts that are older than three years can usually be discharged. The Internal Revenue Service must have made an assessment of the taxes due more than 240 days prior to the filing of the bankruptcy. In some cases, these taxes may be deemed “non-dischargeable”, meaning they are not subject to elimination. If the taxpayer fails to file their tax return within two years prior to the filing of the bankruptcy, the bankruptcy court will generally mark the tax as “non-dischargeable”. This means that the debt must be paid in full. The same is true for taxes or penalties due to fraud or willful evasion of taxes. When filing for bankruptcy in Utah, it is important to understand the distinctions between dischargeable and non-dischargeable taxes. Knowing which taxes are eligible for discharge and which are not can help debtors make the most informed decision.

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Can I keep certain types of tax debts when filing for bankruptcy?

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