IRS Bankruptcy

Even if you have filed for bankruptcy, you are still liable for tax debt. Angelenos living in greater Los Angeles, or other metro cities, there are specific IRS bankruptcy laws that cover what can and cannot be discharged in terms of the debt that you owe. It is also true that under what chapter of bankruptcy that you file will also affect the debt that you must pay regardless. For example, if you file Chapter 7 bankruptcy, you are more likely to have tax debt discharged compared to Chapter 13 bankruptcy. In general, Chapter 7 bankruptcy lets you discharge medical bills, credit card debt, and even federal tax debt depending on the circumstances. Call us to settle your tax debt at 877-788-2937 today.

What Tax Debt can be Discharged

If you live in greater Los Angeles, or other metro city in America, assuming you are filing for Chapter 13, the IRS bankruptcy rules regarding what tax debt may be discharged includes the following;

  • Income Taxes
  • No Willful Tax Evasion Noted
  • No Tax Fraud Noted
  • Tax Liability Over 3 Years Old
  • You File a Legitimate Tax Return
  • 240-day Rule

The 240-day rule is when the IRS oversees tax debt that was noted 240 days before bankruptcy is filed. If the IRS decided to suspend its collection efforts when negotiations were ongoing, then the date may be extended depending on the circumstances. Keep in mind that the penalties on the taxes that are considered dischargeable may also be done away with as well.

However, keep in mind that IRS bankruptcy rules allow them under Chapter 7 to place a federal tax lien on your property before the bankruptcy case is heard. This means that before you can sell your property, you will need to pay off the tax lien first. It’s possible that the IRS will grant you the time to build up enough funds so that you can pay off the lien later. Call us to settle your tax debt at 877-788-2937 today.

What Tax Debt Cannot be Discharged

Even under Chapter 7 bankruptcy, there are some tax debts that cannot be discharged. This means that it will need to be paid one way or another under the IRS rules and regulations.

  • Debt from Unfiled Tax Returns
  • Penalties from Tax Debt that is Ineligible to Discharge
  • Withholding or Trust Fund Taxes Withheld from Employee’s Paycheck by Employer

While this debt cannot be discharged, payments can be arraigned such as installments or the IRS may be inclined to reduce the amount if it can be paid off at once through an offer in compromise settlement. In any case, some amount will have to be paid, so you will need to be prepared under IRS bankruptcy laws to pay off this debt. Call us to settle your tax debt at 877-788-2937 today.

The bottom line is that if you owe taxes, filing for bankruptcy may not prevent them from being paid in one form or another. So, your best option is to learn more about IRS bankruptcy laws, rules, and regulations and get professional assistance if you are faced with the IRS wanting to collect unpaid taxes. The good news is that the right representation may significantly reduce what you owe or at least create a system of easier payments so you can get out of tax debt.

Call us today at 877-788-2937 to settle your tax debt.

Or boutique tax service firm led by Mike Habib serves clients in greater Los Angeles, Santa Monica, Beverly Hills, Whittier, Pasadena, Lancaster, Long Beach, Santa Ana, Irvine, Newport Beach, Orange County, Inland Empire, San Bernardino, Riverside, Corona, we offer nationwide tax settlement service through offer in compromise.

Client Reviews
Mike has given us peace of mind! He helped negotiate down a large balance and get us on a payment plan that we can afford with no worries! The stress of dealing with the IRS is huge and Mike helped us through it all. The peace of mind is invaluable, thank you Mike! April S.
Mike Habib - Thank you for being so professional and honest and taking care of my brothers IRS situation. We are so relieved it is over and the offer in compromise process went just as you said. Mike is very professional and will give you honest answers to the OIC process and you can really trust him. You won't be sorry you chose him! Joe and Deborah V.
Mike is a true professional. He really came thru for me and my business. Dealing with the IRS is very scary. I'm a small business person who works hard and Mike helped me see that they are not that scary after all. He was always there with the answers I needed and was very good about calling me back which I appreciated since your first reaction is to freak out and ask a million questions. He solved a messy case and worked very hard to resolve it. His rates are VERY reasonable for the amount of work he does! I give him my highest recommendation! Marcie R.
Mike was incredibly responsive to my IRS issues. Once I decided to go with him (after interviewing numerous other tax professionals), he got on the phone with the IRS immediately (as in the same day I signed with him) to squash an impending issue. And he worked directly with them to quickly come to a resolution I am very happy with. I'd highly recommend reaching out to Mike to see if he can help you with any IRS issues. I'm very satisfied! Marshall W.
I’ve seen and heard plenty of commercials on TV and radio for businesses offering tax help. I did my research on many of them only to discover numerous complaints and unresolved tax issues. I found Mike Habib through my own online search and contacted him. He was very professional with great communication, always answering my questions and concerns. Mike resolved my complicated tax problem just as he said he would. I would definitely recommend his services to family and friends. Nancy & Sal V.