Many clients think they have no options when it comes to resolving tax debts. Fortunately, that isn’t the case.
You may have several options for dealing with tax debts. The possible strategies may include:
Sometimes the Internal Revenue Service (IRS) and the California Franchise Tax Board (FTB) are just like any other creditor and will settle with you. An Offer In Compromise may be a good option if you can’t pay the full tax balance, or if paying in full would make it impossible to pay your necessary living expenses.
In evaluating your offer to settle, the taxing authorities consider your ability to pay (income v. expenses), income, expenses, and asset equity. In addition:
Bankruptcy filers can sometimes discharge (wipe out) non-priority income tax debts in Chapter 7 bankruptcy. Several criteria must be met for the taxes to be dischargeable, non-priority tax debts.
To get started, you need to order copies of your federal tax account transcript. Order a transcript for each tax year you are trying to discharge. If you have California Franchise Tax Board taxes, you also need to order copies of your Franchise Tax Board account transcripts.
Even if your taxes are priority taxes, you may still get significant help from a Chapter 13 bankruptcy. Chapter 13 may help with taxes the following ways:
To schedule a free consultation with Karen Ware, call 805-284-0760 or 818-668-9019 or use our online scheduling tool.