Filing Bankruptcy to Settle Tax Debts

Clients often call me saying they want to file bankruptcy in order to settle their tax debts. Here's exactly what I tell them. First, bankruptcy should be your last tactic, after you have tried unsuccessfully to get out of tax debt using another debt strategy. Also, you need to know the five rules for discharging tax debts in bankruptcy. You also need to know that the Bankruptcy Court will demand that all your tax returns for the previous four years be filed, and you will be required to produce a copy of last year's tax return to the Bankruptcy Court. Because of the complexity of the tax situation, I urge anyone considering bankruptcy to seek the hire an experienced tax professional.