Bankruptcy and the IRS

Proceeding blindly is something that you rarely want to do with the IRS. If you owe back taxes, or have unfiled returns, or are in any way concerned about an IRS problem, it’s best to first find out what the IRS knows about you. What is the IRS doing on your account?  What can they […]

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It is complicated enough to understand when taxes can be discharged in a bankruptcy.  But once it is determined that your taxes can be done away with in bankruptcy, another potential hurdle rears its ugly head:  Bankruptcy means testing. Means testing determines what type of bankruptcy you qualify to file – Chapter 7, which eliminates […]

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Chapter 7 is for you if you do not have any money left at the end of the month to repay your creditors.  It is designed to give you a fresh start from honest mistakes you made in your finances – too much credit card debt, medical bills, a failed business and yes, unpaid taxes. […]

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The ability to file a collection due process appeal is probably the most powerful right you have in defending against IRS enforcement by levy or seizure. Due process, in the context of IRS collections, means the right to reach resolution of your case before the IRS can take your property, and the right to have […]

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As a general rule, count on IRS interest and penalties doubling the amount you owe every five years.   Interest is only part of the cause; it is the penalties that really hurt. Interest rates charged by the IRS are not unfair – the federal short-term  rate plus 3%.  This has left IRS interest hovering […]

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Another great question from a reader on how the bankruptcy code and tax code can intersect when discharging taxes in bankruptcy. Dear Mr. Levy, We owe income tax from 2007.  We filed the return on October 15, 2008 with an extension.  We filed a collection due process appeal and had a hearing, agreeing to monthly […]

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