Tax Problems — IRS Wage Garnishment — Bankruptcy Tax Relief — Federal Tax Lien
If you have IRS Tax problems, a Federal Tax Lien, Tax Levy, IRS wage Garnishment, or any other tax problem, contact Texas Bankruptcy Attorney R.J.Atkinson for a free bankruptcy evaluation and a free bankruptcy means test to help you determine how you can deal with your Taxes in bankruptcy. Bankruptcy and Taxes can be complicated subject to understand. We can explain your legal options to address tax problems in bankruptcy at a free initial consultation. Whether you are eligible to file for Chapter 7 Bankruptcy and completely eliminate your personal income tax liability, or instead you for Chapter 13 Bankruptcy to repay your taxes over 3 to 5 years, filing for bankruptcy can be an option to deal with IRS Tax liability.
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, has imposed limits to a taxpayer's ability to discharge certain taxes in a Chapter 13 Bankruptcy repayment plan. It’s important for anyone facing tax problems to consult an attorney that is experienced in bankruptcy and non-bankruptcy options to address tax debts.
People in Texas who owe taxes may consider filing for bankruptcy to get rid of their tax debt, or to deal with their tax problems through bankruptcy reorganization. Many taxes can be discharged in a bankruptcy proceeding depending on what type of taxes they are as well as when the taxes came due. Oftentimes, people in Texas, including some tax professionals, are under the wrong impression that Federal income tax liabilities are not dischargeable in bankruptcy. That presumption is wrong. While the rules on discharging taxes in bankruptcy can be quite complicated, filing for bankruptcy may be an excellent way to stop the IRS from collection actions, wage garnishments, levies on bank accounts, and liens on property.
Taxes and Bankruptcy often involve many complicated questions of law. Whether or not you can get rid of your taxes in bankruptcy depends on the facts of your particular situation. The discharge in bankruptcy provides that certain taxes are dischargeable under specific conditions. In order to determine dischargeability of taxes in bankruptcy, it requires an understanding of different areas of law, which includes the United States Bankruptcy Code, the Internal Revenue Code or “Federal Tax Code”, as well as Texas law as it relates to bankruptcy exemptions and Texas State Taxes. Entire books have been written on Taxes and Bankruptcy, so as you might imagine, the laws, rules, and regulations regarding taxes and bankruptcy are too complicated to thoroughly explain here. There are some generalities which apply in most situations involving taxes and bankruptcy, but every situation is different, and should be evaluated on a case by case basis by an experienced Texas Bankruptcy Lawyer.
When a person files for bankruptcy and has tax liability to the IRS or any other taxing authority, the filing of the bankruptcy case automatically stops or “stays” all collection actions on those taxes. Filing for bankruptcy will stop IRS collection actions, including, IRS seizures of property, IRS wage garnishments, IRS bank account levies, Federal Tax Liens, and lawsuits in Tax Court proceedings. The automatic stay of bankruptcy will stop any legal actions by the IRS and bring the issues into the forum of the Bankruptcy Court. Filing bankruptcy when you owe taxes can enable you to get rid of the tax liability by obtaining a bankruptcy discharge or to reorganize your tax liabilities utilizing a bankruptcy repayment plan.
In order to discharge taxes in bankruptcy, the income tax liability must meet the following conditions.
- A tax return must have actually been filed for the delinquent tax liability owed;
- At least 240 days have passed since the IRS assessed and determined what you owe;
- The taxes must have been filed two years before you file a bankruptcy petition; and
- The taxes must have been due at least 3 years before the filing of the bankruptcy petition. Or in other words, they became due three years prior to filing your bankruptcy.
Whether personal income tax liability can be discharged is mainly based on certain timeframes, or the lapse of specific timeframes from a tax return’s due date, the specific filing date of the return, the actual assessment date of the tax, and then to the date of the bankruptcy filing. This may seem a bit complicated but discharging personal income tax liability in bankruptcy usually comes down to timeframes.
If you are aware of any of the above dates and believe your personal income taxes are dischargeable in a bankruptcy, it’s always a good idea to obtain a copy of your IRS transcripts just to be certain. You can get a copy of your tax transcripts directly from the Internal Revenue Service.
Even in situations where you meet with the timeframes above, other criteria may prevent you from getting rid of your taxes in a bankruptcy. You first need to make sure you are eligible for bankruptcy and meet the conditions of the Bankruptcy Means Test. If you have determined your eligibility for Chapter 7 Bankruptcy or your eligibility for Chapter 13 Bankruptcy, your income tax liability still might not be dischargeable in bankruptcy if the Internal Revenue Service can prove you willfully tried to evade the tax or fraudulently filed your tax return. Tax fraud, hiding assets, and tax evasion can make income tax liability non-dischargeable.
Whether you live in Austin, San Antonio, Houston, or Dallas, and have IRS Problems, IRS Wage Garnishment, a Tax Levy, a Federal Tax lien, or owe money for income taxes, payroll taxes, or have other Tax Problems, you may have bankruptcy options to get rid of, or reduce your tax liability. Contact the Texas Bankruptcy Attorneys at The Law Offices Of R.J.Atkinson for a free initial consultation. If bankruptcy is not an option to address your tax liability, we may be able to help you address your tax problems with tax resolution services outside of bankruptcy.