How can I retire if I owe to the IRS?

I’m over 65 and have a very limited income….less than $25000 per year. I want to retire but I owe over $10K in back taxes. If I file for bankruptcy, will all debts be included, even debts owed to the IRS?

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  1. Yes all debts including IRS and NYS income tax debts need to be included in your petition for bankruptcy. Taxes can be dis-chargeable, but there are certain rules that need to be adhered too. Generally, the tax liability has to be older then three years and can not have any new assessments within 240 days from filing your bankruptcy case. So, if your tax liability is from 2008 (due date 4/15/2009) then you could discharge this debt if you have not had any new assessments with 240 days of the bankruptcy filing. However, if the tax liability is due for tax year 2011 (due date 4/15/2012) then this tax is not dis-chargeable because within three years of the bankruptcy filing. Your bankruptcy attorney needs your accountant to verify these important dates. Need to be smart and file at the correct time. Can only file bankruptcy once every 8 years, so you need to make it count.

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