More on Taxes and Bankruptcy Back Taxes And You! If you're worried about not paying some money that you owe the IRS, you should be. Back taxes owed is nothing to ignore! We all want to pay our taxes, but sometimes circumstances make is so that when it is time to pay .... the money had to spent elsewhere. In many situations, bankruptcy is an effective means of dealing with back taxes, especially when compared with installment plans or Offers in Compromise ("OIC"):
- In bankruptcy, the taxpayer is protected by the "automatic stay" - a court order that goes into effect upon filing immediately barring all creditors, including the IRS or state tax authority, from enforcement actions such as seizures or garnishments of bank accounts or wages.
- The taxpayer has the benefit of an independent decision-maker in the federal bankruptcy judge instead of the tax agency itself acting as sole "judge, jury and executioner."
- Chapter 13 bankruptcy offers particular advantages:
- Interest-free repayment: Interest is stopped and cannot accrue on nondischargeable taxes while the taxes are paid off in the Chapter 13 plan.
- Realistic repayment terms: The Chapter 13 repayment plan is , at least in part, based on the debtor's actual expenses, not just arbitrary standards for housing, living, and transportation expenses imposed in an Offer in Compromise which often are not realistic.
- Flexibility: If the tax is still too large to pay off in a Chapter 13 plan from projected income, the taxpayer can dismiss the bankruptcy at any time and attempt an Offer in Compromise based on inability to pay.
- Deal with tax liens: The taxpayer can ask the court to eliminate or reduce tax liens for older, dischargeable taxes to the value of the underlying collateral, thereby "freezing" the size of the tax, and then pay off that reduced amount in the Chapter 13 plan.
- Quick and less expensive: Chapter 13 plans are confirmed within a few months, while an IRS decision on an Offer in Compromise often takes a year or more.
Filing Bankruptcy Stops Tax Garnishments! One of the most common ways for the IRS or State Revenue Office to collect money is to garnish or levy your wages. A garnishment that will suck money out of your wages and away from your family. Money that is desperately needed to take care of you and your family's housing and food. Filing bankruptcy stops tax garnishments. No if's .. No buts..Stopped Cold. As soon as the taxing authority finds out about your bankruptcy, it must act immediately to stop the garnishment. That is the power of the federal bankruptcy laws. It does NOT matter what kind of tax you owe. The garnishment must stop. You may still owe for the tax, but with the garnishment stopped and the other powers bestowed upon you by filing bankruptcy, you are in a better position to deal with that tax on terms you can afford. With you in control...instead of them. And...if the tax is of a kind that you can get rid of in bankruptcy...that is the end of the garnishment...forever. A Lot Of IRS Income Taxes Are Dischargeable: If your problem is Income Taxes (as opposed to something like Withholding taxes), and if the taxes you owe are more than 3 years old, you may not have to pay them back at all. That is right. You may not have to pay it back at all. The fact is that certain older taxes are "dischargeable" which means you can get rid of it by filing bankruptcy. There are 4 rules to apply to see if your back income taxes are dischargeable, our Indianapolis and Kokomo bankruptcy attorneys know the rules....inside and out. We apply these rules all the time.....and we also know how to get dead-accurate information from the IRS itself to verify what you owe and whether it is dischargeable under these 4 rules. The bottom line truth, we get rid of hundreds of thousands of dollars in income taxes for our clients every year. What About The Taxes I Can't Get Rid Of? There is a bankruptcy for that as well. Under a bankrupcy debt consolidation, you can get up to 60 months to pay the taxes back -- without further penalty or interest normally. Bottomline. You get the IRS off your back for 60 months. It means you can set up payments that may be affordable. For instance....if you owe the IRS $12,000.00 in "non-dischargeable" taxes, you can....in most cases....force the IRS to take payments of as little as $52 per week. In many...if not most....cases, you can also force the IRS to take payments....without adding interest. That's a lot better than just worrying.....a lot better than having the IRS grab your stuff or levy on your bank account.....or worse...a lot better than having the IRS garnish your wages.....and a whole lot better than having to come up with $12,000 in case. Disclaimer: Sure there's more too it than just this, but it's complicated to generalize and cover everyone's potential situation. Results will vary depending on a lot of things. This example and explanation covers a good general description of how Federal Bankruptcy Law takes a situation and fixes it for you. This information is general.....but should tell you that even a very bad situation can afford some fantastic possibilities if you talk to the right person. The Law Office of Steven P. Taylor has handled such situations and can talk with real expertise in these matters. Not everyone can carry this experience and expertise into court. We can... We will. We can sincerely help most people that come in and talk to us. DON'T IGNORE YOUR PAST DUE TAXES!!!! The problem will never just go away by itself! You need to take some action and it has to be the right action! Call for a FREE Confidential Appointment! We will give you all of your options! Call now for a free initial consultation! We can help! We can solve most of your financial problems..... and a few more..... that you might not know you have! Call toll free. Call 1-800-966-8447 today. | 
