If you work in entertainment and have been impacted by the recent wildfires in California, you may have more options than you think when it comes to managing, or even discharging, your tax debt. The IRS and the California Franchise Tax Board have extended relief to fire victims, and in some cases, you may qualify to discharge certain tax obligations through bankruptcy.
At Janus Law, we help creatives, freelancers, performers, and behind-the-scenes professionals understand what legal tools are available when disasters disrupt your livelihood. We also collaborate with your accountant or tax preparer to build the strongest path forward. If the fires turned your financial life upside down, it’s time to consider what legal relief may be possible.
Discharging Tax Debt After a Natural Disaster
Most people assume that taxes follow you forever. And in many cases, they do—but not always. Federal and California tax laws include narrow windows where individuals can discharge certain income tax debts through bankruptcy. When a disaster like the recent wildfires strikes, those windows may open wider than usual.
Here’s what to look at when evaluating whether your tax debt may be dischargeable:
- The Three-Year Rule: You can discharge income taxes in bankruptcy if they were due at least three years before the bankruptcy filing. So, for example, if you owe taxes from 2020, they may be eligible if you file in 2024—assuming all other criteria are met.
- The Two-Year Filing Rule: You must have filed the tax return at least two years before filing for bankruptcy. Late returns can complicate this, but not always disqualify you. If the return was filed honestly and you meet the other criteria, the door may still be open.
- The 240-Day Rule: The IRS must have assessed the taxes at least 240 days before you file for bankruptcy. This rule often overlaps with the others but is an essential part of the puzzle.
- No Tax Lien Has been Filed: At the time of contemplating a bankruptcy filing, if the taxing authority has filed a tax lien, the taxes will not automatically be discharged.
- The tax obligation must be income tax and not payroll tax or sales and use tax
Now, here’s where the recent fires may make a difference.
The IRS has granted automatic extensions for taxpayers in certain counties affected by the fires. These include extended filing and payment deadlines—some lasting until June or even October 2025. That gives you more breathing room, but it also changes the dates you need to calculate for discharge eligibility. The timing matters. And if you’re already overwhelmed by how the fires have affected your income, home, or health, trying to sort this out on your own can feel impossible.
That’s where we step in. At Janus Law, we use the disaster-related extensions and relief rules to your advantage. We work closely with your tax preparer to make sure everyone is on the same page. Together, we’ll determine whether your taxes meet the criteria for discharge and help you chart the right legal strategy if they do.
Why This Matters for California’s Entertainment Workforce
In a state like California, income is often volatile even during good times. When disaster strikes, it hits even harder. Gigs dry up. Productions pause. Set builders, lighting crews, wardrobe stylists, and freelance creatives often don’t have the safety nets employees in other industries may take for granted.
Here’s why legal tax relief matters right now:
- Loss of work = lost wages and no benefits. Wildfire evacuations, studio shutdowns, and delayed productions can leave you without income for months. Even one missed project can send your finances into a tailspin.
- You’re self-employed or on a 1099. Freelancers in entertainment often owe quarterly taxes and don’t have withholding. That makes it easy to fall behind—especially if you weren’t expecting your next check to evaporate.
- You’re still recovering. Rebuilding a home, replacing equipment, or navigating trauma from a fire takes time—and money. Every dollar going to old tax bills could be used for immediate needs.
Filing bankruptcy may not be your first choice. But in the right situation, it can be the smart one. And discharging tax debt you thought you’d be stuck with forever? That’s a welcome change.
We know how important your reputation is in the entertainment industry. That’s why we work confidentially and carefully. Our goal is to help you get back on solid ground—without disrupting your career. Whether you’re a screenwriter in Topanga, a grip in Santa Clarita, or a production assistant in Burbank, our team will take the time to understand your story and find the right legal relief for your situation.
Talk to a Bankruptcy Attorney Who Understands Disaster Relief
If you’re still dealing with the fallout of the fires—financially or emotionally—you don’t have to figure this out alone. Tax discharge in bankruptcy is complex. Disaster extensions make the timing even trickier. But with the right team, you can pursue the fresh start you deserve.
At Janus Law, we help entertainment professionals across California explore their legal options when disaster strikes. We’ll review your tax debt, explain whether bankruptcy can help, and work directly with your accountant or tax preparer so you don’t have to coordinate all the moving pieces.
We know the industry. We understand disaster relief. And we know how to protect your future.
Reach out right now for a confidential consultation.
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