Bankruptcy Taxes Relief Sometimes Allowable
Topics: bankruptcy, bankruptcy taxes, bankruptcy taxes relief sometimes allowable
The majority of tax professionals in the United States, as well as most US taxpayers, would say that Federal income taxes are not allowed to be discharged through filing for brokeness. However, this is an incorrect belief and should be placed in the category of myth. The fact of the matter is, there are certain conditions that do allow people to receive bankruptcy taxes relief at the time that they file bankrupt.
Gaining tax through bankruptcy proceedings is a complicated matter, and undoubtedly this is one reason that there is a great deal of confusion regarding this issue. If you are in a situation where you have Federal back tax issues that are due, then it is even more important to get professional help with bankruptcy, as the tax issue complicates the process even more than in a normal bankruptcy case.
There must be great care taken in the process of filing for brokeness, to be certain that all the details are properly handled, especially when any type of taxes are to be included among the debts.
Finding the middle ground amid the maze of US Federal Bankruptcy codes, the code of the Internal Revenue Service, the lien and levy rights of the IRS and the protections for the taxpayer, is very complex. But in some situations, bankruptcy taxes relief can be the best way to resolve a serious tax issue, plus debt, and to put a stop to the intense collection activities of the IRS.
Filing for taxes relief though either a Chapter 13 or a Chapter 7 one will cause an automatic stay to be issued. This will effectively stop all collection activities. This includes stopping bank account levying and garnishing of wages by the IRS and other creditors as well.
Once the stay is issued, the taxpayer and their attorney have some breathing room and time to decide how to best proceed. They can either attempt to get a discharge of the tax debt under a Chapter 7 filing, or they can reorganize the tax obligation by filing Chapter 13 bankruptcy. Which Chapter is filed will depend on a number of factors, including the total amount of all the debts that are owed, the assets of the debtor and the expected future income and ability to pay under a Chapter 13 reorganization.
In 2005, the US Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). This act made a number of reforms to the Federal Code governing filing for brokeness. One of these changes was a merging of the discharge rules that applied under a Chapter 7, a Chapter 11, and a Chapter 13 bankruptcy.
The best advice is to seek good help if you need to seek bankruptcy taxes relief because of how complex the issue is. There is no blanket approach to dealing with taxes through filing for brokeness, but each case is taken on an individual basis and the circumstances of the individual are taken into account as well. As a general statement, it can be said that in most cases older tax debts can be discharged, but newer tax obligations tend to be treated much like property taxes and cannot be discharged.
Educate yourself further about bankrupcy taxes relief from Mike Selvon articles portal at bankruptcy.trustprofitableniche.com. Your feedback is valued and appreciated at our bankruptcy information blog at www.mynicheportal.com where a free audio gift awaits you.
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