While unpaid tax debts are certainly a very serious issue for any taxpayer, it is important to give yourself credit for taking action and exploring your options for repayment or settlement of the debt. Instead of taking steps to solve their tax problems, some taxpayers opt to bury their heads in the sand and hope that the problem will go away. This is a big mistake when your creditor is the Internal Revenue Service (IRS). In nearly all cases, the IRS is not going to back down if you owe money and refuse to cooperate. Fortunately, several potential solutions could be available to you. One solution is to explore bankruptcy as a way to reduce or eliminate your tax debt.
Considerations for Utilizing Bankruptcy as a Solution to Tax Debt
Following are six issues your attorney will consider when assessing bankruptcy as a workable solution to your tax debt problem:
- Your attorney will asses the type of tax that you owe to determine whether it is of the type and nature that is dischargeable in a bankruptcy proceeding. Not all types of tax debt qualify. For example, if you owe payroll taxes from the small convenience store that you own and operate in Oklahoma City, this type of tax cannot be discharged.
- Your attorney will assess whether all of your tax returns have been filed. If they were filed, he will look at the date they were filed but taxes were unpaid.
- Your attorney will review the age of the tax that you owe and when it was assessed.
- Your attorney will verify that you did not file fraudulent tax returns.
- Your attorney will confirm that you did not file tax returns that contain frivolous tax arguments for not paying the tax that you owe.
- Your attorney will ensure that you are not guilty of tax evasion. If you purposefully misstate your assets and expenses in an attempt to avoid paying taxes that you owe, you will not qualify to have the debt eliminated in a bankruptcy proceeding.
Now that you have learned more about what you can expect when working with an attorney to find an alternative solution to resolve unpaid tax debt, your next step is to schedule a complimentary consultation. We encourage you to reach out by completing the easy, online contact form directly on our website. We look forward to meeting you!