If you are experiencing a hardship and cannot pay your tax liability in full, the Division of Revenue has several programs for you to consider. Among those are options to pay on an installment basis, offer a compromised amount, request your account be placed in temporarily uncollectible status until such time you are able to once again make payments. The Division of Revenue is anxious to work with you to resolve your tax liability and to eliminate the need for you to consider bankruptcy as an alternative.
However, if you are involved in an on-going bankruptcy proceeding, contact your local Delaware Division of Revenue office. Provide them with the district (i.e., Delaware) the bankruptcy was filed, when it was filed, what chapter of the bankruptcy code was filed, the bankruptcy case number, and who is representing you in the bankruptcy. If you have not filed all of your State tax returns, you should do so as soon as possible.
PLEASE BE ADVISED THAT FAILURE TO FILE ALL OF YOUR REQUIRED TAX RETURNS MAY RESULT IN YOUR BANKRUPTCY PLAN CONFIRMATION BEING DELAYED, YOUR BANKRUPTCY MAY ALSO BE DISMISSED OR CONVERTED TO A LIQUIDATION BANKRUPTCY. ALTERNATELY, THE DIVISION OF REVENUE MAY HAVE TO ESTIMATE IT’S LIABILITY WHICH MAY REQUIRE YOU TO PAY MORE THAN WOULD BE NECESSARY IF YOU FILED THE REQUIRED RETURNS.
You will also need to keep your attorney advised as to the tax periods, type of tax, amounts, and the recent breakdown of tax, penalty, and interest of any liabilities you have incurred.
Your filing of bankruptcy will temporarily stop the Delaware Division of Revenue enforcement action to collect a debt related to tax periods that are prepetition (i.e.; before the bankruptcy petition was filed). You should pay in full or make arrangements to satisfy all liabilities associated with tax periods that were post petition (i.e.; after the bankruptcy petition was filed). The Delaware Division of Revenue may continue to audit, demand tax returns, and assess the tax for both pre-petition and post-petition taxes.
Discharge ability of your tax liability should be discussed with your attorney. In many instances, your liability, or a portion of it, may not be discharged. When you have identified that your taxes were not discharged by your bankruptcy, please contact your local Delaware Division of Revenue office to make arrangements to satisfy your tax debit. If you believe that your bankruptcy discharged your tax debt, or a portion thereof, for which the Delaware Division of Revenue is continuing it's efforts to collect, please send a letter with a copy of your bankruptcy discharge explaining what portion of your liability is believed to be discharged. The letter should be addressed to the Bankruptcy Administrator, Delaware Division of Revenue - 8th Floor, 820 N. French Street, Wilmington, Delaware 19801.
If you are a creditor in a bankruptcy and are in need of a claim or information relating to the bankruptcy please click onto the following links:
- For general information regarding bankruptcy, please see information posted by the U.S. Courts:
(Click on link to "Bankruptcy Basics")
- For Bankruptcy information concerning cases filed, local forms (including claims), local rules, etc. in the District of Delaware:
- For Bankruptcy information concerning cases filed, local forms (including claims), local rules, etc. in Bankruptcy Courts other than the District of Delaware: