Los Angeles IRS Tax Debt Lawyers
Benjamin Franklin is known to have said that nothing is certain except death and taxes. It’s true that the government is rather determined when it comes to collecting taxes, and they have a special agency (of course we mean the Internal Revenue Service, the IRS) with 80,000 employees and a $14 billion budget aimed at making sure they get those taxes. If you fail to pay your taxes on time, the government has several means at its disposal to collect them for you, including garnishing your wages, levying your bank accounts, placing liens on your home and other assets and even possibly foreclosing on your home.
You are not without resources of your own when it comes to dealing with tax debt, however. Certain tax debts can be eliminated or dealt with in a bankruptcy filing, and others can be settled for less than the amount owed through a special form of debt settlement known as an offer in compromise. The Board-Certified bankruptcy specialists at Wadhwani & Shanfeld can explore your options with you and pursue the best course to help you deal with tax debts and IRS collection activities. Call our Los Angeles IRS tax debt lawyers right now to speak with an attorney and start getting help immediately.
Eliminating Federal Income Tax Debts in Chapter 7
Chapter 7 bankruptcy is a way to rid yourself of unsecured debts and get a fresh start. Although tax debts are unsecured, they are in a special category known as priority debts and are therefore generally not dischargeable in bankruptcy. Other examples of priority debts that are not removed in Chapter 7 include child support, alimony, and court-ordered restitution.
That said, U.S. bankruptcy law does allow federal income tax debts to be discharged in Chapter 7 in limited circumstances. Federal income tax debts can be eliminated through Chapter 7 bankruptcy provided the following conditions are met:
- The debt relates to a tax return with a filing deadline that is more than three years old
- The related return was filed two years ago or longer
- It has been 240 days or more since the tax was assessed
- There is no evidence of fraud or tax evasion regarding the tax return in question
Tax debts can also be dealt with in Chapter 13 bankruptcy by rolling them into your repayment plan. You can pay off the debt affordably over a three or five-year period without having to worry about any collection activity from the IRS.
Eliminating Tax Debt Through an Offer in Compromise
An offer in compromise is like a debt settlement; it is a negotiation between you and your creditor (in this case the IRS or California’s Franchise Tax Board (FTB) for state taxes) where the government agrees to accept less than the amount owed in satisfaction (payment in full) of the debt. While negotiations for an offer in compromise are ongoing, the IRS or FTB will suspend any collection activity, giving you breathing room and stopping any bank account levies, tax liens or wage garnishments.
An offer in compromise could be used to eliminate various kinds of tax debts, including:
- Fed income tax debt that doesn’t meet the requirements for discharge in bankruptcy
- California State Income Tax
- Estate Taxes
- Gift Taxes
For the government to accept an offer in compromise in settlement of a tax debt, you must be able to establish certain facts, such as:
- A legitimate dispute with the government over the existence of a tax debt
- A legitimate dispute with the government over the amount owed
- A legitimate concern that you would be able to pay the amount due
- Proof that collecting the tax would be unfair to you or create an undue hardship
- Proof that an offer in compromise would further the efficient administration of the nation’s tax laws
As debt relief experts who negotiate debt settlements on behalf of individuals and families in Los Angeles every day, our attorneys at Wadhwani & Shanfeld are a perfect team to intervene on your behalf and negotiate an offer in compromise with the IRS. We’ll gather the necessary information and put forward a strong and persuasive case as to why an offer in compromise should be accepted. The IRS uses a complex formula to determine how much they would accept as an offer in compromise to settle your tax debt. We understand how to apply this formula and can let you know at the outset what we might be able to obtain for you.
Contact Our Los Angeles IRS Tax Debt Lawyers Today
Tax debts are serious; they can’t be ignored and they won’t go away on their own. On the contrary, the government can be very aggressive about collecting unpaid taxes, along with interest and penalties, and take measures that hurt your finances when you are already struggling to make ends meet. You have options, and the certified bankruptcy specialists at Wadhwani & Shanfeld can help. Call now to speak to a lawyer now, and get started today getting the help you need.