Pre-Bankruptcy Planning

Before filing for bankruptcy, there may be better options for resolving your tax debt. We help you explore every alternative and plan strategically if bankruptcy is the right path.

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Tax Planning Before Bankruptcy

If you are considering bankruptcy as a way to resolve tax debt, it is critical to understand what taxes can and cannot be discharged, and to plan accordingly. Not all tax debts are dischargeable in bankruptcy, and filing at the wrong time can result in your tax debt surviving the process entirely.

When Tax Debt Can Be Discharged

Generally, income tax debt may be dischargeable in Chapter 7 bankruptcy if the tax return was due at least three years before filing, the return was filed at least two years before filing, the tax was assessed at least 240 days before filing, and the return was not fraudulent and you did not willfully attempt to evade the tax.

Alternatives to Consider

Before pursuing bankruptcy, we evaluate all available options including Offers in Compromise, installment agreements, Currently Not Collectible status, and penalty abatement. In many cases, one of these alternatives resolves the tax problem without the long-term consequences of bankruptcy.

Why Infinity

You Deserve an Accountant Who Actually Cares

We built Infinity Accounting Solutions around a simple belief: business owners deserve expert accounting support without feeling like just another client number. By combining modern technology with old-school relationship building, we provide the personalized service, accessibility, and trusted guidance that businesses need to grow with confidence.

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Relationships come first. We believe accounting is about more than just numbers. We build long-term relationships based on trust, communication, and a genuine understanding of your business.

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Whether you need bookkeeping, controllership support, or tax guidance, we're here to help you make informed decisions, not just deliver reports.

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Frequently Asked Questions

Common Questions About Pre-Bankruptcy Planning

Can bankruptcy eliminate my tax debt?

Some tax debts can be discharged in bankruptcy, but strict timing rules apply. Income taxes that meet the "3-2-240 rule" may be dischargeable. Trust fund taxes (like payroll taxes) are never dischargeable. We help you understand which debts qualify.

Should I file for bankruptcy to resolve tax debt?

Bankruptcy should be a last resort for tax debt. In many cases, IRS resolution options like Offers in Compromise or installment agreements are more effective. We evaluate all options before recommending bankruptcy.