Banruptcy Myth: Bankruptcy Won't Discharge Tax Debt

Many taxpayers think Bankruptcy is their Tax Debt salvation, a literal Get out of Tax Debt Free Card!  Hate to break it to you, but that's a myth!

Even if you do qualify to get your Tax Debt discharged, it rarely means the debt is gone for good!


 
You're not off the hook: Tax Debt can be included in bankruptcy, but it's difficult. The following Three IRS Bankruptcy Rules usually prevent your debt from being discharged. 

1. The 3 Year Rule: You cannot discharge tax debt that's older than 3 years old, the first painful disqualifier!

2. Interest and Penalties Don't Quit: Your account will be placed on hold while you try to discharged it. This mean you don't receive collection actions, but interest and penalties continue to accrue! If you're unlucky, your tax debt may return bigger and badder than even if your Tax Debt isn't charged.

3. More Time to Collect: That hold the IRS placed your account under is a blessing and a curse. Like I said, you won't get collection actions, but the IRS will extend the amount of time they have to collect on your back taxes!  

So, about those alternatives... As you can see, Bankruptcy is simply not the ideal option for discharging your tax debt. But when you really can't pay, there are options available for you that will keep the IRS off your back without the negatives that come with Bankrtupcy.

I  highly recommend working with a professional to find the right plan for you. If you need help, feel free fill out the form on the right/give me a call at 1-888-415-1337 and we'll find the right plan for you!

IRS Notice of Deficiency: What it Means & Protecting Your Cash

It doesn't make sense! You paid your taxes by the deadline, yet the IRS still delivered a Notice of Deficiency! Why did the IRS send it when you were a responsible citizen, doing the right thing and paying your taxes? Unfortunately, this notice means the IRS wants you to pay even more! If you know you don't owe, get the facts and learn your options for contesting this notice:

Watch that Deadline: Your timing is critical. Make sure you pay or resolve the issue within the 90-day deadline if you don't want to face IRS collection actions.

You can call the IRS, but they're not going to extend your deadline. So what should you do next?

Know the Loopholes: The IRS makes mistakes. Sure, those mistakes are rare, but as a former IRS Agent, I know they do happen! Sometimes your Notice of Deficiency is sent to the wrong address. If this is proven, Tax Court will dismiss the case. But if they feel you owe, they will issue another Notice of Deficiency, so be prepared!

Take it to Tax Court: You can take them to court if you know you don't owe. The IRS Notice of Deficiency gives you instructions for filing a petition with the tax court (this is Form 12203 "Request for Appeals Review").

The court may schedule a case for a trial. Use the time before the court date to round up documents which prove you do not owe the IRS. 

Let's be real here. It's going to be nearly impossible to win a case against the IRS. Gather substantial evidence, and armor up and hire help for the battle!

Unfiled Tax Returns and Your Tax Debt: How to Get Caught Up

Didn't File? The IRS won't tolerate nonfilers. You may have gotten away with it for a while, but once you're caught the punishments include criminal charges, jail time, and sky-high penalties! But don't worry, it's never too late to get right with the IRS, even when you already owe back taxes!

You Owe Back Taxes: Let's say you're already caught. The IRS is pressuring you to pay up. At this stage, voluntarily filing your tax returns and catching up with the IRS is a necessary first step to resolving your back taxes. Work with a professional to hunt down the paperwork and get to it!

Don't Let the IRS File For You: You have to act fast when you haven't filed. If the IRS files a "Substitute for Return" on your behalf, you'll be sorry! The IRS will not apply the deductions, exemptions or credits you're entitled to. They will file the taxes in their best interest.

Keep In Mind: When a Tax Return is filed on time, IRS personnel view the return briefly. Late Tax Returns are hand-screened by specially trained IRS personnel. Your late Tax Return is under far more scrutiny, so file carefully.

Risks of Not Filing:

- Criminal Investigation: It's no secret that you risk jail time if you fail to file your taxes. It's rare, but possible.

- Penalties, Penalties, Penalties: Penalties and fines accrue on your account when you file late. They can double or even triple your tax debt.

- Refunds Denied: If you file too late, you may lose your refund (Internal Revenue Code 6511a.) Only by filing within two years of the original due date will you qualify for the refund. After two years, it takes a very rare exception to get your money!

It's not too late... A lot of people won't file their Back Taxes out of fear. They think if they start to file this year, the IRS will automatically check for all the years not filed. Wrong! The IRS wants to encourage nonfilers to file again. Get professional help and file your taxes, and take care of your tax debt before it's too late!

Owing the IRS Back Taxes: 5 Ways to Survive Their Attacks

The sudden letter from the IRS stopped you in your tracks. You owe the IRS back taxes, and if you don't do something now you'll be at the mercy of the IRS's Tax Liens, Wage Garnishments, and Bank Levies.

Here are 5 ways you can survive the IRS's attacks long enough to find the right solutions for your tax case:

1.Do You Owe? In some rare cases, the IRS notice you received may have been sent in error. In other cases, this debt could be the responsibility of a spouse or ex spouse. To tell the truth, notices are rarely sent in error, but check it out, then continue.

2. Don't Panic, Act: Resist the temptation to ignore your IRS notice and try to forget about the tax issue. You will be issue a Wage Garnishment, Bank Levy, or Tax Lien before you know it if you let your problem go untreated. Start to find your solution immediately.

3. Installment Agreements: The best way to protect yourself from IRS attacks is to make an agreement with the IRS and pay off your debt. There are a variety of installment agreement options that work for different situations. If you owe more than $10,000, you should talk to a tax debt professional to make sure the IRS does not pressure you into an unaffordable payment plan.

4. Settlements and More: Tax Settlements like an "Offer in Compromise" are out of reach for most taxpayers. It's very hard to qualify for this kind of payment option.

5. Don't Wait for them to contact you: If you suspect you owe, but the IRS hasn't contacted you yet, don't wait patiently to hear from the IRS. Wait around, and the IRS will let you know you owe with their Tax Liens, Wage Garnishments, and Bank Levies. Contact a professional for a solution, then go from there to contact the IRS.

Final Tip, Buying Time: Working with a professional can buy you valuable time to decide your next step. The IRS typically halts collection actions while power of attorney is put into place. Consider contacting a professional first and going from there to solve your tax issue, but do it quickly!

Getting Help: You can contact my team and I if you need help, simply fill out the from to the right, e-mail me, or call me at 1-888-415-1337.