Bankruptcy and Taxes

Tax Bankruptcy

Bankruptcy taxes are best defined by the business or individuals who want to wipe out or reduce their tax through bankruptcy. To go through this type of bankruptcy taxes procedure, two forms of bankruptcy taxes protection are typically used: Chapter 7 and Chapter 13.

A Chapter 7 is a traditional "liquidating" bankruptcy. A trustee is appointed for the sole purpose of protecting the unsecured creditors. A Chapter 13 is for a small debtor with regular income who can make monthly payments against his or her debts.

Under Internal Revenue Code 1398, added by the Bankruptcy Taxes Act of 1980, the filing of a tax bankruptcy petition under Chapter 7 creates an "estate" which is then treated as a separate taxable entity. This estate then files its own tax returns and pays taxes on its own income. The filing of a tax bankruptcy petition under Chapter 13 creates an estate for purposes of the bankruptcy taxes code, the estate is not treated as a separate taxable entity.

The Effect of Bankruptcy Taxes on IRS Collection Action

Filing a bankruptcy and federal taxes petition is like putting kryptonite in front of Superman. The effect on bankruptcy and federal taxes is Immediate, upon filing. Once you file a tax bankruptcy, an "automatic stay" arises and all IRS enforced collection action must cease temporarily. In this manner bankruptcy income taxes help is quick. As soon as it learns of the filing of a bankruptcy taxes petition, the IRS posts its computer system with a "bankruptcy hold" code to avoid inadvertent violation of the automatic stay.

Can I eliminate my tax debt through Bankruptcy?

Yes. However, bankruptcy and taxes laws are always changing, so its always best to consult with a certified bankruptcy taxes lawyer before proceeding. In fact, the IRS is now allowed to take some limited steps to determine and assess tax debts despite the filing of a petition.

Among other things, their permitted actions include:

  • Demanding any and all delinquent returns be filed
  • Issuing summonses to determine the true tax liability
  • Auditing taxpayer's returns
  • Issuing a notice of deficiency
  • Assessing uncontested liabilities
  • Re-filing a notice of federal tax lien

Bankruptcy income taxes are unique tax situations and should be handled carefully. The lawyers at TaxLawFirm.net can help you with your bankruptcy taxes issue.

Wipe Out Taxes though Bankruptcy Taxes Defense

Filing for bankruptcy can lead to discharging your tax debts as well as other debts. Doing so, can give you a new start. However, when it comes to bankruptcy and taxes, it is extremely important to consult an experienced tax attorney, as the rules concerning bankruptcy are quite complicated for determining. Such as, if and when a taxpayer can be relieved of income tax liabilities through a bankruptcy filing. Additionally, there may be other alternatives, such as an "offer in compromise", to explore rather than bankruptcy.

Please be aware, there is proposed federal legislation that would make it more difficult to discharge your debts with bankruptcy. So, if you are considering bankruptcy, or you believe that bankruptcy would be an effective method of relieving you of your debt, consult with a bankruptcy and federal tax attorney as soon as possible.

The Best Defense for Your Bankruptcy Income Taxes Case is US.

For over two decades, the attorneys at TaxLawFirm.net have provided quality, professional legal counsel to both individuals and businesses going through matters related to bankruptcy taxes. In addition to helping you with negotiation and representation, our tax attorneys are there to fight for your rights. The attorneys at TaxLawFirm.net are specialists in bankruptcy taxes and related matters.

Contact us to schedule a consultation with one of our certified tax attorneys. Evening and weekend hours are available by appointment.

What are Bankruptcy Taxes?

Bankruptcy taxes are best defined by the businesses or individuals who want to wipe out reduce their tax through bankruptcy. To go through this type of bankruptcy taxes procedure, two forms of bankruptcy taxes protection are typically used: Chapter 7 and Chapter 13.

A Chapter 7 is a traditional "liquidating" bankruptcy. A trustee is appointed for the sole purpose of protecting the unsecured creditors. A Chapter 13 is for a small debtor with regular income who can make monthly payments against his or her debts.

Under Internal Revenue Code 1398, added by the Bankruptcy Taxes Act of 1980, the filing of a tax bankruptcy petition under Chapter 7 creates an "estate" which is then treated as a separate taxable entity. This estate then files its own tax returns and pays taxes on its own income. The filing of a tax bankruptcy petition under Chapter 13 creates an estate for purposes of the bankruptcy taxes code, the estate is not treated as a separate taxable entity.

The Effect of Bankruptcy Taxes on IRS Collection Action

Filing a bankruptcy and federal taxes petition is like putting kryptonite in front of Superman. The effect on bankruptcy and federal taxes is Immediate, upon filing. Once you file a tax bankruptcy, an "automatic stay" arises and all IRS enforced collection action must cease temporarily. In this manner bankruptcy income taxes help is quick. As soon as it learns of the filing of a bankruptcy taxes petition, the IRS posts its computer system with a "bankruptcy hold" code to avoid inadvertent violation of the automatic stay.

Can I eliminate my Debt through Bankruptcy Taxes?

Yes. However, bankruptcy and taxes laws are always changing, so its always best to consult with a certified bankruptcy taxes lawyer before proceeding. In fact, the IRS is now allowed to take some limited steps to determine and assess tax debts despite the filing of a petition.

Among other things, permitted IRS actions include:

  • Demanding any and all delinquent returns be filed
  • Issuing summonses to determine the true tax liability
  • Auditing taxpayer's returns
  • Issuing a notice of deficiency
  • Assessing uncontested liabilities
  • Re-filing a notice of federal tax lien

Bankruptcy income taxes are unique tax situations and should be handled carefully. The lawyers at TaxLawFirm.net can help you with your bankruptcy taxes issue.

Wipe Out Taxes though Bankruptcy Taxes Defense

Filing for bankruptcy can lead to discharging your tax debts as well as other debts. Doing so, can give you a new start. However, when it comes to bankruptcy and taxes, it is extremely important to consult an experienced bankruptcy taxes attorney, as the rules concerning bankruptcy income taxes are quite complicated for determining if and when a taxpayer can be relieved of an income tax liabilities through a bankruptcy filing. Additionally, there may be other alternatives, such as an “offer in compromise”, to explore rather than tax bankruptcy.

Please be aware, there is proposed federal legislation that would make it more difficult to discharge your debts with bankruptcy taxes filings. Some of these proposed changes would make it particular difficult to discharge tax debts through bankruptcy taxes type filings. So, if you are considering bankruptcy taxes files, or you believe that bankruptcy would be an effective method of relieving you your debt, consult with a bankruptcy and federal taxes attorney as soon as possible.

The Best Defense for Your Bankruptcy Income Taxes Case is US.

For over two decades, the attorneys at TaxLawFirm.net have provided quality, professional legal counsel to both individuals and businesses going through matters related to bankruptcy taxes. In addition to helping you with negotiation and representation, our tax attorneys are there to fight for your rights. The attorneys at TaxLawFirm.net are specialists in bankruptcy taxes and related matters.

Contact us to schedule a Tax Attorney consultation. Evening and weekend hours are available by appointment.

Among other things, permitted IRS actions include:

  • Demanding any and all delinquent returns be filed
  • Issuing summonses to determine the true tax liability
  • Auditing taxpayer's returns
  • Issuing a notice of deficiency
  • Assessing uncontested liabilities
  • Re-filing a notice of federal tax lien