Van Nuys IRS Tax Debt Lawyer
Struggling with any type of debt is incredibly difficult. However, when you owe taxes to the IRS, it is particularly stressful. The federal government, particularly the Internal Revenue Service (IRS) has many tools at its disposal to ensure they receive the tax money they are owed. If you do not pay your taxes, the IRS may garnish your wages, levy your bank accounts, and place a lien on your home or start foreclosure proceedings.
If you cannot afford to pay your taxes, all of these collection methods will only put you in further financial distress. Below, our Van Nuys IRS tax debt lawyer explains your options.
Can Bankruptcy Eliminate IRS Tax Debt?
Many people consider filing Chapter 7 bankruptcy when they need to eliminate their unsecured debt and get a clean financial slate. While tax debts are unsecured, meaning they are not tied to collateral, they are also priority debts. Generally speaking, you cannot use Chapter 7 to discharge priority debts. Alimony, child support, and court-ordered restitution are other types of priority debts.
Still, federal law does allow you to discharge tax debt using Chapter 7 bankruptcy in some situations. If you can meet the following conditions, it may be possible to eliminate tax debt using Chapter 7:
- The debt is related to tax returns with deadlines for filing that are over three years old,
- The return that resulted in debt was filed two or more years ago,
- The tax was assessed 240 or more days ago, or
- The tax return does not involve tax evasion or fraud.
The other most common type of bankruptcy is Chapter 13. This type of bankruptcy is easier to qualify for, and you do not meet the above requirements to file Chapter 13. This is due to the fact that your tax debt will be reorganized into a repayment plan. While you will still be responsible for the debt, you will have between three and five years to pay it.
Offers in Compromise
An offer in compromise can help you reach an agreement with the IRS to pay less than the total amount of tax debt owed. While you are negotiating an offer in compromise with the IRS, all collection attempts are suspended. This means you will be able to continue to access your financial accounts, and it may give you more time to come up with the funds to pay your outstanding debt.
To reach an agreement with the IRS through an offer in compromise, you must establish certain facts. These are as follows:
- You have valid reason to believe you do not owe the tax debt,
- You disagree with the amount the IRS is stating you owe,
- You worry you cannot pay the amount due, or
- Paying the tax would create an undue hardship for you.
Our IRS Tax Debt Lawyer in Van Nuys Can Help with Your Case
Ignoring your tax debt will not make it go away. At Wadhwani & Shanfeld, our Van Nuys IRS tax debt lawyer knows the tactics the government uses to collect on this debt, and how detrimental they are. Call us now at 818-658-2669 or chat with us online to request a consultation.
