Bankruptcy Tax Litigation and the Discharge of Taxes in Bankruptcy

Most tax practitioners and most tax resolution businesses are hard pressed to include a bankruptcy review in their business models, just significantly different from what they do.


I have made bankruptcy my default position, namely defining if a bankruptcy will work. The Internal Revenue Service does not have to agree in a bankruptcy proceeding, unlike all other remedies for tax collection. A court will decide if and when the IRS objects. Most bankruptcy lawyers do not want to deal with tax claims.

Examining all other collection remedies through a bankruptcy microscope can and usually will significantly alter your evaluation. A bankruptcy can be filed just to discharge taxes; but that filing can draw fire from the Internal Revenue Service and the US Trustee’s Office, a bankruptcy monitoring office in the United State Department of Justice. Every case has specific issues.