Frequently Asked Questions About Tax And Bankruptcy
You might be surprised to know that bankruptcy under the right circumstances can discharge your federal and state income tax liabilities. If you find yourself wondering whether bankruptcy may help you alleviate your tax debt, the seriousness of your situation has likely set in and left you searching for answers.
At the Law Offices of Robert T. Leonard, we recognize that difficult financial straits can place significant stress on individual taxpayers and businesses. As such, we offer the information below as a way to help you begin to understand how bankruptcy affects tax debt and whether the bankruptcy process can help you. After reviewing this information, please contact us to arrange a free consultation and receive custom-tailored advice directly from lawyer and CPA Rob Leonard.
Our office is located in Woodland Hills, but our practice encompasses the entire state of California — including Los Angeles and the San Fernando Valley — and the rest of the nation.
What Types Of Taxes Are Dischargeable In Bankruptcy?
Bankruptcy relief primarily applies to income tax. Employee withholding tax, sales tax and most other types of tax are not dischargeable, or can be discharged only in certain, rare circumstances.
Are There Alternatives To Bankruptcy That Can Help With My Tax Debt?
Yes. Offers in compromise, installment agreements, payment plans and other options may be available. We can help you determine which option is best suited to your particular situation.
How Old Must Debt Be Before It Can Be Discharged In Bankruptcy?
There are a number of rules that must be satisfied in order to discharge tax debt. Some of these rules are referred to as the “three-year rule,” the “two-year rule” and the “240-day rule.” Further, there are a number of filings (i.e. offer in compromise) which may suspend or toll the timing of these rules. In order to obtain an accurate analysis of the availability of bankruptcy, you need to have an experienced tax attorney prepare the analysis.
What Is A Tax Lien, And Can It Be Removed In Bankruptcy?
Tax liens are a legal tool that the government uses to secure a claim against your personal and real property when you fail to pay the full amount of tax owed. These liens can attach to your personal property and real estate that you own, and they are not dischargeable in bankruptcy. However, there are a number of strategies available to either subordinate the lien of get the lien released. Further, if liens have not yet been filed, there are certain strategies available to reduce the effect of the lien filing. These strategies are time sensitive, and you should contact us as soon as possible to obtain information and protect your assets.
How Can I Learn More? Contact Us.
Call our office at 818-485-2115 to schedule a free consultation with attorney Rob Leonard. He will provide you with all of the information that you need to fully understand your situation, and walk you through the benefits and drawbacks of bankruptcy and all other legal options. You may also contact us online.