Owe the Internal Revenue Service? And, looking for a way to manage your tax debts? If you find yourself owing the IRS, particularly for multiple years, you might be feeling, and rightly so, a high level of anxiety. Few creditors have as much authority to collect as the Internal Revenue Service. They can levy on your bank account. They can garnish your wages. They can even garnish up to 15% of certain types of social security benefits. It might feel overwhelming, but it is important to find out your rights and options. Filing bankruptcy is one of several alternatives to consider when seeking solutions to your tax problems.
Generally, there are two chapters of the code available to file, Chapter 7 and Chapter 13. Chapter 13 bankruptcy is a repayment chapter, where you repay some or all of your debts over a period of three to five years. It is important to know that you may or may not have to pay the full amount owed to the IRS when filing chapter 13. That varies from case to case based upon a number of factors, some of which are noted below.
Chapter 7 bankruptcy does not involve repayment of debts, and you might be able to discharge some or all of your tax debt, once again depending on a number of factors.
What are these factors? Well, there are several. Picture a track with hurdles around it, each representing a factor for determining dischargeability. Some of these hurdles would include the age of the tax debt, whether your tax returns were filed timely, whether the returns were substantially correct at the time they were filed, whether the IRS has assessed a different amount owed and whether it has been at least 240 days since that assessment was made. If you are able to jump all of the relevant hurdles, some or all of your tax debt might be dischargeable.
IRS issues are complex, so it is important to consult a professional to figure out the best course of action for your individual situation. Attorney Corey Mills has the experience and skills to help you find your way out of debt. Give us a call or fill out the contact form on our website. There is hope, and we are here to help.