Filing Bankruptcy: What Happens to the Tax Debt?
Financial troubles are not something to take lightly in any case, no matter how dire they may be. In the modern world it can be quite hard to run a business and look after your own well-being at the same time. Not everyone is capable of doing this and whether it is a human error or an impossibly difficult market to navigate, failed businesses and huge money losses are a frequent things. One thing people who experience something like this is to declare bankruptcy. However, doing so is not that straightforward and there needs to be a lot of thought and planning put into it.
While announcing bankruptcy may help you to start from the very beginning, you will still have the credit scores to lose and the debt to deal with afterwards. Unpaid tax debt requires unique solutions based on your particular situation as no two cases are ever the same. Some of the debts can be discharged by the IRS, but it only happens under certain conditions that are often strict and hard to meet. This is why it is usually better to consult with the professionals on Debtstoppers.com about your particular case. Bankruptcy can provide you with a second chance and get you a way out from all the challenges with your tax debt, but you have to learn your possibilities. Going in blindly and not being informed enough on the matters is the best way to do it poorly and not get the result you imagined.
Bankruptcy Without Taxes: Is It Possible?
As mentioned, bankruptcy comes in a variety of different ways. Among the most asked questions is whether or not it is possible without paying the taxes involved. You will be happy to learn that you can file for bankruptcy to avoid paying the taxes but only when your business is down. This procedure can help you to back out of the taxes you have to pay to the IRS and make your overall case easier to handle. No matter whether you have a state or federal tax debt, you still can escape the taxes you owe. However, to do this, you need to provide specific reasons why you need such a service. Pay attention to the following demands for the discharged tax debt in case you are eligible for it:
- Type of the taxes. There are different types of taxes, and only income taxes can be discharged when bankruptcy has been declared. You cannot escape the employment taxes or payroll taxes. In addition, You will have to pay sales tax and trust fund taxes. In specific cases, the IRS can allow you not to pay property taxes;
- The age of your debt. If you have a debt that is at least 3 years old or older, you can file for You need to calculate the date, starting from the original due date. The new debt for the last 2 years does not qualify to be discharged;
- The proper filing of the return. If you decide to trick the system or fail to file for it the right way, you will be immediately returned to the line of those who have to pay the debt. You have to file the tax return properly, without any mistakes, else you will risk it all and your case will not be taken up. Do not try to falsify your return, or you will have to pay the debt and potentially experience further legal problems and fines ;
- The date of return filing. The best way to ask for the discharge is exactly on time. The longer you delay it, the fewer chances you will have to come out on top. According to federal law, you have to file the tax return 2 years before announcing the bankruptcy. You will have to check the law of your state more closely for any other variations and opportunities;
- The time you assessed the tax debt. You may need to consult Debt Stoppers bankruptcy attorneys to understand the procedure a little better. They will surely help you with any type of questions you may have.
Good News for You
We realize that filing for bankruptcy is not something you have had planned out whatever it was you set out to do. However, now that you are here, it would be smart to make the most out of it and get the best deal you can. With the right course of action you will have a much better chance to continue where you left off and maybe even realize exactly what you wanted in the first place. A lot of people have managed to become successful even after bankruptcy, so why should you be any different?
As you now know, The IRS has numerous options and advantages for the taxpayers to save their money and avoid paying the debt while announcing bankruptcy. Not all the cases that are filed to the officials can receive a positive answer and it is important for you to remember this. However, with the proper filing of the form and by following the law, your tax debt can be discharged and you can be one of the luckier examples of this option. The IRS does not like to be fooled since too many people are already trying to avoid paying the obligatory taxes causing problems where they should not exist, and you cannot lie about your taxes since they can be easily checked. And they will be checked since they are even if you are doing everything properly, just in case. A simple delay in your tax resolution may also cause you the loss of the canceled debt so be responsible and diligent. The best policy for you is to always provide detailed information, never hide or forget anything, always do it on time, and ask for the professional help of an attorney if you need it so that you are not alone in your struggles and to have the best chance of overcoming this obstacle.