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.