Wiped Taxes

Today TaxMama hears from Sam in MO who wants to know, “I had a bankruptcy in 1997 from a failed business. At that time I owed employee withholding taxes which were listed on my bankruptcy. Knock on wood, I have never heard from the IRS. Were those taxes wiped clean from the bankruptcy? Same situation with Missouri State sales tax.”

Hi Sam,

If you haven’t heard from IRS all this time, odds are, the taxes were discharged in bankruptcy.

Look at your old bankruptcy papers and it will include a list of creditors and the amount of debt that the court eliminated.

If you can’t find the records, do nothing right now. Wait for about another 2-3 years for the IRS collections period to end. The statute of limitations for IRS to collection money from you is 10 years, plus the amount of time you were in bankruptcy.

When that time passes, call IRS and see if they are showing any kind of a balance under your Social Security number, or your old business taxpayer identification number.

Unless, of course, you’re so prosperous now that you’d like to pay any balance you might owe.
In that case, call now and offer IRS your money.

But I think you’re fine. You see, IRS aggressively chases after unpaid payroll taxes. So, if you haven’t heard from IRS about payroll taxes all this time, they probably were erased in the bankruptcy. Same with Missouri.

And remember, you can find answers to all kinds of questions about bankruptcy and all kinds of other tax issues, free. Where? Where else? At TaxMama.com

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