Santa Clarita IRS Tax Debt Lawyer
Wadhwani & Shanfeld is a consumer bankruptcy and debt relief law firm that helps Santa Clarita residents and families across Los Angeles County deal with back taxes, levies, liens, and the collection notices that come with them. When the IRS is the creditor, the usual rules of debt collection change, and a Santa Clarita IRS tax debt lawyer has to work from a different playbook than the one used for credit cards or medical bills.
The difference starts with what the IRS can do without ever going to court. A private creditor generally has to sue you, win a judgment, and then ask a court to authorize a wage garnishment or bank levy. The IRS can issue a levy on its own authority after sending the required notices. That is why an IRS balance deserves attention earlier than most other debts, and why the choice between negotiating, bankruptcy, or an installment arrangement depends on details like how old the tax year is, whether returns were filed, and whether a lien has been recorded.
Tax debt is also one of the few categories where bankruptcy can work in one case and fail in the next. Some older income tax debt can be wiped out in Chapter 7, while newer tax debt generally cannot. Chapter 13 can bring priority tax debt into a single monthly plan payment. Sorting out which situation you are in is the first job.
Why Choose Wadhwani & Shanfeld for IRS Tax Debt Help
Wadhwani & Shanfeld has helped more than 30,000 individuals and families resolve debt, and the firm is led by two Board-Certified Specialists in Consumer Bankruptcy through the American Board of Certification. The firm’s attorneys bring more than 90 years of combined legal experience to cases involving Chapter 7, Chapter 13, debt settlement, foreclosure defense, wage garnishment, creditor lawsuits, and IRS tax debt. Clients in Santa Clarita and throughout Los Angeles, Orange, Riverside, and San Bernardino Counties can speak directly with an attorney from the first call, with no pressure to come in first, and the entire case can be handled by phone, email, video, or online chat.
Raj Wadhwani, a founding shareholder and partner, is a Southwestern Law School graduate who helped pilot the Best Case Bankruptcy software in 1998 and was the first attorney to file a bankruptcy case electronically in the Central District of California. Greg Shanfeld, also a founding shareholder and partner, earned his law degree from the University of Southern California and has handled more than 10,000 bankruptcy cases over three decades. Both are board certified in consumer bankruptcy, a distinction held by a small fraction of attorneys.
That depth matters on a tax problem because the best answer is often a combination: a bankruptcy chapter for the old, dischargeable years, and a payment arrangement or negotiation for the recent ones. A firm that handles both bankruptcy and its alternatives can recommend what fits rather than what it happens to sell. The firm also acts quickly when a garnishment, foreclosure sale, or repossession is days away, and a free consultation is available.
Common IRS Tax Debt Situations We See
- Unfiled or Late Returns: Years of missed filings often create the largest balances because penalties and interest pile onto estimates the IRS prepares on its own. Getting returns filed accurately is usually the first step, and filing status and filing dates can decide whether the debt is dischargeable later.
- Self-Employment and Small Business Tax Debt: Contractors, gig workers, and small business owners in the Santa Clarita Valley often owe estimated taxes they never set aside. These balances can be paired with other business debt, and small business bankruptcy or business debt solutions may be part of the answer.
- Older Income Tax Debt: Some income tax debt can be discharged in Chapter 7 if it meets specific timing rules tied to the return due date, the filing date, and the assessment date. Debt that misses those rules generally survives.
- Priority Tax Debt in Chapter 13: Recent taxes that Chapter 7 cannot eliminate can be folded into a three to five year repayment plan, which also freezes collection while the plan runs.
- IRS Levies on Wages and Bank Accounts: A levy takes money directly from your paycheck or account. Unlike an ordinary creditor garnishment, the California wage garnishment caps and deposit account exemptions that apply to judgment creditors do not govern a federal levy.
- Federal Tax Liens: A lien attaches to your property and can interfere with refinancing or selling a home. Bankruptcy can address the personal debt but may not remove a lien that was recorded before the case, so equity and timing matter.
- Tax Debt Combined with Other Debt: Many clients owe the IRS while also carrying credit card balances, personal loans, or a second mortgage. Chapter 7 can clear the unsecured consumer debt while a separate plan handles the tax.
What to Do When the IRS Has Come After You
Start by gathering every notice you have received and putting them in date order. IRS letters carry deadlines, and the type of letter tells an attorney exactly where you are in the collection process. A balance-due notice is very different from a final notice of intent to levy, and the response window on the latter is short. Do not ignore a notice because you disagree with the amount; a timely response keeps your options open, while silence can hand the IRS the authority to levy.
Next, pull together your returns for the last several years, recent pay stubs, bank statements, and a list of your monthly expenses and debts. If you have unfiled years, say so up front. A lawyer needs the full picture to tell you whether bankruptcy, a payment arrangement, or negotiation makes sense, and surprises discovered later can hurt a case.
If a levy has already hit your paycheck or bank account, call right away. Filing a Chapter 7 or Chapter 13 case triggers the automatic stay, which halts most collection activity the moment the petition is filed, and the firm can move fast when money is being taken. Be careful about paying one debt heavily out of panic, withdrawing large sums, or moving assets, since those moves can complicate a later filing.
If bankruptcy becomes the path, your case will be filed in the U.S. Bankruptcy Court for the Central District of California. Which division hears it depends on the zip code of your street address, not a P.O. box. Santa Clarita is on the San Fernando Valley Division’s community list with a footnote, so the zip code should be confirmed with the court’s locator before a division is assigned. For any separate lawsuit from a private creditor, Los Angeles County Superior Court has a Santa Clarita courthouse that serves the area. The firm files in every division of the Central District, so that detail is handled for you.
How Bankruptcy and Tax Debt Interact in California
Bankruptcy does not treat all tax debt alike. In Chapter 7, qualifying older income taxes can be discharged, while recent taxes, trust fund taxes, and debts tied to fraud or willful evasion generally cannot. Chapter 13 handles the other side of the problem: priority taxes are paid in full through the plan, but over time and without ongoing levy pressure, and interest typically stops accruing on much of the balance while the plan is in effect. Because the rules turn on dates, your return history is the key document.
Protecting property is the other half of the analysis. California does not use the federal exemptions; it offers two state systems, and you must choose one for your entire case. One system carries a substantial homestead exemption suited to homeowners, while the other offers a flexible wildcard that often helps renters. You generally must have lived in California for at least 730 days to use these exemptions. Santa Clarita homeowners often have meaningful equity, so choosing the right system, and deciding whether Chapter 7 or Chapter 13 shields that equity best, is one of the most consequential decisions in the case.
When bankruptcy is not the best fit, the firm also handles representation with the IRS to stop levies and set up payment arrangements, along with debt settlement and direct negotiation on other debts. You get a recommendation based on what works, not on the only service a firm offers.
Questions About IRS Tax Debt in Santa Clarita
Can bankruptcy eliminate IRS tax debt?
Sometimes. Older income tax debt that meets specific timing rules can be discharged in Chapter 7. Recent income taxes generally cannot, but Chapter 13 can bring them into a repayment plan. An attorney needs your return dates to say which category you fall into.
Can the IRS take my paycheck without going to court?
Yes. After sending the required notices, the IRS can issue a levy on wages or bank accounts without a court judgment. That is a major difference from private creditors, who generally must sue first.
Do California’s wage garnishment limits protect me from an IRS levy?
No. The percentage caps and deposit account protections in California law apply to ordinary judgment creditors. A federal tax levy follows federal rules, which is why acting before one lands matters.
Will filing bankruptcy stop the IRS from collecting?
Filing a Chapter 7 or Chapter 13 case starts the automatic stay, which halts most collection activity immediately, including levies. How long relief lasts and what happens to the tax debt afterward depends on the type of tax and the chapter you file.
What if I never filed my tax returns?
Get them filed. The IRS may have estimated your income and assessed a larger balance than you actually owe, and whether and when a return was filed can affect whether the debt can ever be discharged. An attorney can help you sequence the filings with any bankruptcy.
Does Chapter 13 make sense if I owe recent taxes?
Often, yes. Priority tax debt that Chapter 7 cannot eliminate can be paid through a three to five year plan, and creditors are bound once the court confirms it. You need steady income to qualify.
Can I set up a payment plan with the IRS instead of filing?
Often you can, and for a moderate balance that may be the right move. The firm represents clients with the IRS to stop levies and arrange payments, and it will tell you honestly when bankruptcy is not necessary.
What happens to a federal tax lien if I file bankruptcy?
Bankruptcy can eliminate your personal liability on dischargeable tax debt, but a lien recorded before filing can remain attached to property you own. Whether that matters depends on how much equity you have and what you plan to do with the property.
Can a private creditor’s lawsuit and an IRS balance be handled together?
Yes. A bankruptcy filing halts creditor lawsuits and collection while addressing consumer debt, and the tax portion can be resolved through the discharge rules, a Chapter 13 plan, or a separate arrangement. Handling them in one strategy usually beats treating each in isolation.
Will my employer find out about an IRS levy or my bankruptcy?
An employer that receives a wage levy will know about it, since it must send the money. A bankruptcy filing does not automatically notify your employer, though Chapter 13 plan payments may be deducted from pay. California and federal law bar firing you solely for filing bankruptcy.
Do I have to come into an office to get help?
No. The firm offers 100% virtual consultations and can handle your whole case by phone, email, video, and online chat, with in-person meetings available if you prefer.
Serving Santa Clarita and the Surrounding Communities
Wadhwani & Shanfeld represents tax debt clients in Santa Clarita and across Los Angeles County, from the Santa Clarita Valley down through the San Fernando Valley communities of Sylmar, San Fernando, Mission Hills, North Hills, Granada Hills, Northridge, Reseda, Encino, Woodland Hills, Van Nuys, Sherman Oaks, and North Hollywood. The firm also serves Hollywood, Santa Monica, the Westside, and the city of Los Angeles itself.
To the north, the firm serves the Antelope Valley, including Lancaster, Palmdale, and Acton. South and east, clients come from Long Beach, Lakewood, Torrance, Compton, Inglewood, Gardena, Norwalk, Bellflower, Paramount, Cerritos, Cypress, Signal Hill, and Huntington Park, as well as Pomona, Claremont, Glendora, West Covina, Chino, and Chino Hills in the eastern San Gabriel Valley and Inland Empire.
The firm’s reach continues through Orange County, including Anaheim, Santa Ana, Garden Grove, Buena Park, Fullerton, Huntington Beach, Westminster, Costa Mesa, Newport Beach, Tustin, La Habra, Placentia, Mission Viejo, and Laguna Niguel, and across Riverside and San Bernardino Counties, including Ontario, Rancho Cucamonga, Upland, Fontana, San Bernardino, Riverside, Montclair, and the Coachella Valley.
Talk With a Santa Clarita IRS Tax Debt Attorney
You do not have to wait for a levy to hit your paycheck before getting answers. A Santa Clarita IRS tax debt attorney at Wadhwani & Shanfeld can review your notices, your return history, and your income and property, then explain which path gives you the best result, whether that is Chapter 7, Chapter 13, an arrangement with the IRS, or a combination. Call for a free consultation and speak directly with an attorney, or arrange a virtual consultation that fits your schedule.
