Legal Question in Bankruptcy in California

Filing bankruptcy can be an effective way of dealing with IRS debt. First of all, any BK filing halts all collection activity. Also, the tax debt can be discharged (erased) in a bankruptcy if the income tax debt meets all five of these rules:

1. The due date for filing a tax return is at least three years ago.

2. The tax return was filed at least two years ago.

3. The tax assessment is at least 240 days old.

4. The tax return was not fraudulent.

5. The taxpayer is not guilty of tax evasion.