Bankruptcy and Non-Bankruptcy Tax Relief Options - We Can Help You Get Your Taxes Under Control Honestly and Quickly So You Can Focus On Your Life and Business
It is a common misconception of people in financial distress that there is relief available for unpaid tax debts, because they believe the government will always get paid its taxes "no matter what." While this seems sensible, it simply is not true. In fact, there are several avenues for business owners or wage owners to get significant relief from taxes they owe, even when there is no question about their original liability for the taxes. The Internal Revenue Service (for Federal Taxes) and Franchise Tax Board (State Taxes) are understanding of debtors' predicaments and regularly participate in processes inside and outside bankruptcy courts to reduce outstanding tax obligations to manageable amounts. In California, sales tax relief may also be available for merchants and other business owners.
Debtors who have filed their tax returns but were unable to meet their tax obligations will be best-positioned for broad tax relief. If you have not filed all your taxes or are under an audit, or have had more taxes assessed recently, we can work with you and your accountant to formulate a plan so you are positioned for the broadest relief as soon as possible with the least amount of stress.
Chapter 7 and Chapter 13 bankruptcy can eliminate many types of tax debts when the required time has passed. The formula intends to balance the need of the tax agency to have a reasonable time to collect taxes against the tax debtor's need for a fresh start. At least the most three recent tax years due will generally be paid in installments over time if you owed taxes for those years. In Chapter 13 you can still get relief from the penalties owed on those taxes and interest on the penalties. Many times the majority of tax debts are penalties and interest on penalties, so this relief can be very substantial, even for recent tax years.
In addition, older taxes from over three tax years ago may be subject to discharge, if they were timely filed (or, if not, filed over two years ago) and new taxes have not been assessed recently (like they are in an audit if the IRS finds more taxes are owed).
We understand many small business owners and wage earners do not want to file bankruptcy and do not have debts other than tax debts, and we can advise them on offers in compromise, installment agreements, catching up on un-filed returns, releasing tax levies and garnishments, and other arrangements to get their taxes and business affairs back under control. We can explain the costs and benefits of non-bankruptcy and bankruptcy approaches and help with both.
We also regularly advise individuals who are contemplating going out of business, or have closed a business already. It is important that certain returns be filed, and certain taxes be paid. Many individuals closing businesses prioritize the wrong debts, or walk away in frustration without properly winding things down, and end up owing large tax debts that they are personally liable for after paying less important creditors who assumed the risk the business would not be financially successful. With sound legal advice, you can avoid this predicament and really move on after closing your business. If you have significant personal liability for taxes, we can help you structure income-based repayment arrangements with - or without - a bankruptcy filing.
Business owners or former business owners who incurred most of their debts in business may qualify for Chapter 7 relief despite having above-average incomes. The bankruptcy code explicitly gives more leeway for entrepreneurs and business owners to seek relief from non-consumer debt, including tax debt. The availability of broad debt relief for entrepreneurs is fundamental to America's success.
By working with a qualified bankruptcy attorney who can also advise on non-bankruptcy tax debt relief, you can avoid a common trap: many of our bankruptcy clients have spent money on non-bankruptcy resolutions first when they would have been better served by bankruptcy. You don't want to pay for legal assistance you do not need. Non-bankruptcy tax relief may not be appropriate, for example, when the debtor has many non-tax debts, or is behind on their mortgage. Unfortunately, heavily advertised tax resolution offices often do not want to work on a bankruptcy case. We would like to assist you with either method of resolution you prefer, so we do not push bankruptcy filings over non-bankruptcy alternatives. Please contact us today through our website if you would like to discuss your bankruptcy and non-bankruptcy options to resolve your tax debts.
Debtors who have filed their tax returns but were unable to meet their tax obligations will be best-positioned for broad tax relief. If you have not filed all your taxes or are under an audit, or have had more taxes assessed recently, we can work with you and your accountant to formulate a plan so you are positioned for the broadest relief as soon as possible with the least amount of stress.
Chapter 7 and Chapter 13 bankruptcy can eliminate many types of tax debts when the required time has passed. The formula intends to balance the need of the tax agency to have a reasonable time to collect taxes against the tax debtor's need for a fresh start. At least the most three recent tax years due will generally be paid in installments over time if you owed taxes for those years. In Chapter 13 you can still get relief from the penalties owed on those taxes and interest on the penalties. Many times the majority of tax debts are penalties and interest on penalties, so this relief can be very substantial, even for recent tax years.
In addition, older taxes from over three tax years ago may be subject to discharge, if they were timely filed (or, if not, filed over two years ago) and new taxes have not been assessed recently (like they are in an audit if the IRS finds more taxes are owed).
We understand many small business owners and wage earners do not want to file bankruptcy and do not have debts other than tax debts, and we can advise them on offers in compromise, installment agreements, catching up on un-filed returns, releasing tax levies and garnishments, and other arrangements to get their taxes and business affairs back under control. We can explain the costs and benefits of non-bankruptcy and bankruptcy approaches and help with both.
We also regularly advise individuals who are contemplating going out of business, or have closed a business already. It is important that certain returns be filed, and certain taxes be paid. Many individuals closing businesses prioritize the wrong debts, or walk away in frustration without properly winding things down, and end up owing large tax debts that they are personally liable for after paying less important creditors who assumed the risk the business would not be financially successful. With sound legal advice, you can avoid this predicament and really move on after closing your business. If you have significant personal liability for taxes, we can help you structure income-based repayment arrangements with - or without - a bankruptcy filing.
Business owners or former business owners who incurred most of their debts in business may qualify for Chapter 7 relief despite having above-average incomes. The bankruptcy code explicitly gives more leeway for entrepreneurs and business owners to seek relief from non-consumer debt, including tax debt. The availability of broad debt relief for entrepreneurs is fundamental to America's success.
By working with a qualified bankruptcy attorney who can also advise on non-bankruptcy tax debt relief, you can avoid a common trap: many of our bankruptcy clients have spent money on non-bankruptcy resolutions first when they would have been better served by bankruptcy. You don't want to pay for legal assistance you do not need. Non-bankruptcy tax relief may not be appropriate, for example, when the debtor has many non-tax debts, or is behind on their mortgage. Unfortunately, heavily advertised tax resolution offices often do not want to work on a bankruptcy case. We would like to assist you with either method of resolution you prefer, so we do not push bankruptcy filings over non-bankruptcy alternatives. Please contact us today through our website if you would like to discuss your bankruptcy and non-bankruptcy options to resolve your tax debts.