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Can bankruptcy remove an IRS tax lien?

Federal income tax debt may be discharged, or forgiven, but the lien itself will not be removed. Tax debt may be discharged only if the tax return was due at least three years prior to bankruptcy and was actually filed no less than two years prior to bankruptcy, the return was not fraudulently prepared, the taxpayer did not try to evade paying taxes and the taxes were assessed at least eight months prior to bankruptcy. Because the lien survives bankruptcy up to the amount of the debtor’s equity in the property subject to the lien, the IRS will be able to use its lien rights to collect on the unpaid debt after the bankruptcy process is over.

To find out more information about bankruptcy in Minnesota, please read our FREE book: What You Need to Know Before You File for Bankruptcy in Minnesota.

Contact our office to schedule an appointment to speak with us. You can reach us by using our online form. We can also be reached by phone at (952) 388-2942 or toll free at (800) 619-8991. Our attorneys can help you to decide whether bankruptcy is right for you and, if so, which type makes the most sense for your particular circumstances. Different types of bankruptcy have different eligibility requirements, and so it is very important that you consult with an attorney prior to planning any bankruptcy-related action.

Barry Rosenzweig
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Barry Rosenzweig, has 25 years experience as an attorney helping clients solve their legal problems.