Van Nuys IRS Tax Debt Lawyer
The IRS does not need a court order to take your money. Unlike a credit card company, which has to sue and win a judgment before it can touch your paycheck or bank account, the federal government can issue levies and file liens on its own authority once a tax debt is assessed. That difference changes everything about how you respond. Wadhwani & Shanfeld is a consumer bankruptcy and debt relief law firm that represents people with IRS tax debt in Van Nuys, throughout the San Fernando Valley, and across Los Angeles County and Southern California.
If you are searching for a Van Nuys IRS tax debt lawyer, you are probably holding a notice, or you have noticed a levy hitting your account, or you owe back taxes from years you could not file. Each of those situations calls for a different response, and the order in which you act matters.
Why Choose Wadhwani & Shanfeld for IRS Tax Debt Relief
Wadhwani & Shanfeld has helped more than 30,000 individuals and families get out from under debt. The firm is led by two Board-Certified Specialists in Consumer Bankruptcy through the American Board of Certification, Raj Wadhwani and Greg Shanfeld, who are founding shareholders and partners. Together the firm’s attorneys bring more than 90 years of combined legal experience to Los Angeles, Orange, Riverside, and San Bernardino County clients.
That credential matters for tax debt because the most powerful tool against an old tax bill is often bankruptcy, and the rules that decide whether a tax debt qualifies are technical. Greg Shanfeld earned his law degree from the University of Southern California and has handled more than 10,000 bankruptcy cases over three decades. Raj Wadhwani, a Southwestern Law School graduate, 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.
Because the firm handles Chapter 7, Chapter 13, debt settlement, and IRS representation under one roof, the recommendation you get is based on what fits your numbers, not on the only service a firm happens to sell. You reach an attorney directly from your first call, the consultation is free, and the firm acts fast when a garnishment, levy, or sale is days away. Cases can be handled entirely by phone, email, video, and online chat, with 100% virtual consultations available.
The Types of IRS Problems We See From Van Nuys Clients
- Unfiled Returns: Years of missing returns often grow into the largest problem because the IRS can file a substitute return for you that ignores deductions. Getting current on filing is usually the first step before any relief is possible, and it also affects whether older tax can later be discharged.
- Wage Levies: The IRS can instruct your employer to send part of every paycheck to the government. Unlike an ordinary creditor garnishment, there is no fixed percentage cap in the same form, so a levy can take a painful share of take-home pay.
- Bank Account Levies: A levy can freeze the funds in your account. The automatic deposit account protection that applies to ordinary civil judgments in California does not carry over to debts owed to the government, so do not assume a small balance is safe.
- Federal Tax Liens: A lien attaches to your property and can cloud a refinance or sale of your home. It is a claim against your assets, which is different from a levy that actually seizes money.
- Older Income Tax Debt: Some income tax debt can be eliminated in Chapter 7 if it meets specific timing rules tied to when the return was due, when it was filed, and when the tax was assessed.
- Priority Tax Debt in Chapter 13: Tax debt that cannot be discharged can be paid through a three to five year Chapter 13 plan, during which collection stops and interest and penalties are handled within the plan.
- Small Business and Self-Employment Tax: Sole proprietors and owners who fell behind on estimated payments or payroll obligations often carry tax debt alongside business debt, and the two need to be addressed together.
- Combined Tax and Consumer Debt: Many clients owe the IRS while also dealing with credit cards, medical bills, and personal loans. Bankruptcy can wipe out the unsecured consumer debt while the tax is dealt with on a separate track.
Bankruptcy Versus a Payment Arrangement: Choosing the Right Route
The central decision with tax debt is whether to eliminate it, reorganize it, or negotiate it. Each route works for some debts and fails for others, and picking wrong can cost you years.
A Chapter 7 bankruptcy can discharge qualifying older income tax debt, along with credit cards, medical bills, and personal loans, in roughly four months. It does not touch tax debt that falls outside the timing rules, and it does not remove a tax lien that was already recorded against your property before you filed. To qualify at all, your household income generally has to pass the means test, which compares your income to the California median for a household your size and then accounts for your actual expenses.
A Chapter 13 bankruptcy fits people with steady income who owe tax that cannot be discharged. Your debts are folded into one monthly payment over three to five years, creditors are bound once the court confirms the plan, and collection activity stops while you pay. It also lets you keep a home with a lien or a mortgage in arrears. Many Van Nuys homeowners with both a tax problem and a mortgage problem find this is the only route that addresses both.
Outside of court, the firm can represent you with the IRS to stop levies and set up payment arrangements. Debt settlement and negotiation can resolve other debts without a filing. The honest answer is sometimes that bankruptcy is not the right tool, and the firm will say so.
What to Do Right Now if the IRS Is Collecting From You
Start by reading every notice you have received and writing down the dates on them. IRS notices carry response deadlines, and some of them preserve rights you lose if the deadline passes, including the right to ask for a hearing before a levy or lien. Do not throw anything away and do not ignore a certified letter. If you have not opened mail from the IRS in months, gather it all before you call.
Next, find out where your filing stands. If you have unfiled returns, you will need them prepared, and a lawyer can help you decide the order in which to file. Do not file returns you cannot pay without first understanding the consequences, but do not stay silent either, because unfiled years keep growing in cost and block many forms of relief.
Then call an attorney before you agree to anything with the IRS. People often sign up for a payment plan that looks affordable on paper and then default because it ignored rent, car payments, and other real expenses. A default can leave you worse off than before. Bring your recent pay stubs, bank statements, your last few tax returns, and every IRS letter to the consultation so the attorney can compare the options against your actual finances.
If a levy or other action is imminent, the filing of a bankruptcy petition triggers the automatic stay, which halts most collection activity the moment the case is filed. The stay also stops creditor lawsuits, garnishments, and foreclosure proceedings. A bankruptcy case for a Van Nuys resident is filed in the San Fernando Valley Division of the U.S. Bankruptcy Court for the Central District of California, which serves Van Nuys along with Sherman Oaks, Encino, Reseda, Northridge, and the surrounding communities. The firm files in every division of that court. Your street address, not a P.O. box, determines which division handles your case.
One more caution: do not pay off other debts with a large lump sum right before filing, and do not move assets to a relative. Transfers made shortly before a bankruptcy can be undone by the trustee and can create problems with your discharge. Talk to the attorney first.
Questions About IRS Tax Debt in Van Nuys
Can the IRS take my paycheck without suing me?
Yes. Once a tax debt is assessed and the required notices have gone out, the IRS can levy your wages and bank accounts without going to court. That is why a tax debt is more urgent than an ordinary credit card balance, where a creditor must sue and win a judgment first.
Can bankruptcy erase IRS tax debt?
Sometimes. Qualifying older income tax debt can be discharged in Chapter 7 if it meets specific timing rules. Tax debt that does not qualify can often be paid through a Chapter 13 plan over three to five years. Many other kinds of tax, including most payroll-related obligations, are not dischargeable the same way, so the type of tax matters as much as its age.
Will bankruptcy stop an IRS levy?
The automatic stay takes effect the moment a petition is filed and halts most collection actions, including levies. In an emergency, the firm can often prepare and file a case quickly to stop a levy or sale that is days away.
Is a federal tax lien the same as a levy?
No. A lien is a legal claim against your property that secures the debt, while a levy is the actual seizure of money or property. You can have a lien without a levy, and a lien can complicate selling or refinancing your home even when no money has been taken.
What if I never filed the returns?
Unfiled returns are common and fixable, but they block most relief until they are addressed. The IRS can prepare a substitute return for you that leaves out deductions you would have claimed, which inflates the balance. Filing accurate returns is usually the first step toward resolving the debt.
Do I need a lawyer, or can a tax preparer handle this?
A preparer can prepare returns, but a bankruptcy petition preparer cannot give legal advice, choose exemptions, or represent you if a trustee or creditor raises a problem. Mistakes in a bankruptcy filing can cost you property or your discharge, so representation by an attorney matters when the stakes involve a federal debt.
Can I keep my home if I owe the IRS?
Often yes. California gives filers a choice between two exemption systems, and one includes a homestead exemption that can protect a substantial amount of home equity. If you have more equity than the exemption covers, or you are behind on the mortgage, Chapter 13 lets you keep the property and catch up over time. Which system you use is a decision made once for the entire case.
Will my employer find out about an IRS levy?
If the IRS levies your wages, your employer receives the levy notice and must comply, so yes, they will know. That is one reason to act before a wage levy is issued. In bankruptcy, your employer is not automatically notified, and California and federal law prohibit an employer from firing you solely because you filed.
How long after bankruptcy before I can file again if tax debt remains?
The waiting periods depend on the chapters involved: 8 years between Chapter 7 filings, 4 years to file Chapter 13 after a Chapter 7, 2 years between Chapter 13 filings, and generally 6 years to file Chapter 7 after a Chapter 13, though that last period can be shortened if your plan paid enough to unsecured creditors. Planning the sequence matters when tax debt remains.
Do I have to come into an office to start?
No. The firm handles cases fully by phone, email, video, and online chat for clients anywhere in Southern California, and offers 100% virtual consultations. You can speak with an attorney first and decide afterward.
What happens to my credit after a tax-related bankruptcy?
A Chapter 7 can stay on your credit report for up to 10 years from filing, and a Chapter 13 is typically removed after 7 years, though the effect on your score fades well before then. Many clients see scores begin to recover within the first year with a secured card, on-time payments, and low balances.
Serving Van Nuys and the Surrounding IRS Tax Debt Clients Across Southern California
The firm’s work for Van Nuys clients extends across the San Fernando Valley, including Sherman Oaks, Encino, Woodland Hills, Reseda, Northridge, Granada Hills, North Hollywood, North Hills, Mission Hills, San Fernando, and Sylmar. We also serve clients in Hollywood, Santa Monica, and the Westside, and in Santa Clarita, Lancaster, Palmdale, Acton, and the wider Antelope Valley.
Across Los Angeles County, the firm represents people in Los Angeles, Long Beach, Lakewood, Torrance, Compton, Inglewood, Gardena, Norwalk, Bellflower, Paramount, Cerritos, Cypress, Signal Hill, and Huntington Park. In the eastern San Gabriel Valley and the Inland Empire, we work with clients in Pomona, Claremont, Glendora, West Covina, Chino, Chino Hills, Montclair, Ontario, Rancho Cucamonga, Upland, Fontana, San Bernardino, Riverside, and the Coachella Valley.
Orange County clients in Anaheim, Santa Ana, Garden Grove, Buena Park, Fullerton, Huntington Beach, Westminster, Costa Mesa, Newport Beach, Tustin, La Habra, Placentia, Mission Viejo, and Laguna Niguel can also turn to the firm for IRS tax debt relief and bankruptcy.
Talk to a Van Nuys IRS Tax Attorney Today
You do not have to wait for the next notice or the next levy to get answers. Call Wadhwani & Shanfeld for a free consultation and speak directly with a Van Nuys IRS tax attorney about whether bankruptcy, a payment arrangement, or settlement gives you the best path out. We will review your income, your property, and the debts you owe, and tell you honestly which option fits. Handle the whole case remotely if that is easier, and call today so we can act before the next deadline.
