Chapter 13 bankruptcy is only available to wage earners, the self-employed and sole proprietors (one person businesses). To qualify for Chapter 13, you must have regular income, have filed all required tax returns for tax periods ending within four years of your bankruptcy filing and meet other requirements set forth in the bankruptcy code.
To take full advantage of the bankruptcy laws and get a fresh start, it is important that you do not continue to incur additional debt. If all or part of the reason you are filing bankruptcy is overdue federal tax debts, you may need to increase your withholding and/or your estimated tax payments. For help determining the proper withholding, visit our online Tax Withholding Estimator. For help with your estimated taxes, visit our Estimated Taxes page.
Find basic information about Chapter 13 bankruptcy below. For more detailed information see the U.S. Courts Bankruptcy Basics Web page.
Federal Tax Refunds During Bankruptcy
You can receive tax refunds while in bankruptcy. However, refunds may be subject to delay or used to pay down your tax debts. If you believe your refund has been delayed or offset against your tax debts you can check on its status by going to our Where’s My Refund tool or by contacting the IRS’ Centralized Insolvency Operations Unit at 1-800-973-0424. The unit is available Monday through Friday from 7:00 a.m. to 10:00 p.m. eastern time.
If you successfully complete your bankruptcy plan you will receive a discharge of debt. A discharge releases you (the debtor) from personal liability for certain dischargeable debts. Some taxes may be dischargeable. Whether a federal tax debt may be discharged depends on the unique facts and circumstances of each case. Consult your bankruptcy attorney to determine which tax debts may be discharged.
Estimated Proofs of Claim
The IRS files estimated proofs of claim if you have unfiled, past due federal tax returns. It’s important to have an up-to-date proof of claim for any federal taxes you owe before confirmation of your Chapter 13 plan. This ensures you don’t pay any more than you need to and minimizes discharge of the tax debt issues upon completion of the Chapter 13 plan.
To help the IRS quickly amend an estimated proof of claim, promptly provide the IRS bankruptcy specialist with a copy of each late filed return for each year on the proof of claim. This helps to avoid unnecessary litigation on the proof of claim or discharge of the liability.
The specialist’s name and contact information are in part 3 of page 3 of the proof of claim. Otherwise, call 800-973-0424 to get the name and phone number of the specialist handling your case.
The specialist will ordinarily amend the proof of claim within 21 days. If you haven’t heard from the specialist within 21 days of submitting your late filed returns, please call 800-973-0424.
General Tax Questions
Please note: We cannot provide legal or other advice about your bankruptcy case. If you have questions about filing and paying your federal taxes you can find answers here on our website and in the list of related topics on the right side of this page. If you want to speak to someone at the IRS please call:
- Individuals – 1-800-829-1040
- Businesses – 1-800-829-4933
For additional tax information on bankruptcy, refer to Publication 908 Bankruptcy Tax Guide, and Publication 5082 What You Should Know About Ch. 13 Bankruptcy .