DO YOU OWE TAXES?
If you think you cannot discharge taxes, you are wrong. In fact, we have discharged hundred of thousands of dollars in tax liability. All you have to do is meet the following four part test:
1. Your taxes must be over 3 years old. And if you took an extension the three year period starts in October even if you filed your taxes a week after taking the extension.
2. The taxes must not have been filed in the two years prior to filing for bankruptcy protection. So even if you have taxes that would be 8 years old, if you filed the forms yesterday, you would have to wait 2 years to discharge them.
3. Any offer and compromise during the assessment period tolls that provision. The assessment period is 240 days from the day the taxes are assessed. They are assessed 30 days after you file them. So once that 240 day period starts to run, you cannot have an offer and compromise. If you do, the time you are in the offer and compromise is not counted in the 240 day period. So if your taxes were assessed for 60 days and you then filed the offer and compromise and it was denied a year later, you would pick up where you left off and have 180 days left on the assessment period.
4. Finally, and this is the point everyone misses: the IRS could not have filed your taxes for you. Once they do that, the taxes are never dischargeable.
HERE IS THE POINT PEOPLE FAIL TO
UNDERSTAND OR JUST IGNORE
Just because we cannot discharge your taxes does not mean we cannot help you. On past due taxes you are paying 10% interest and an 18% penalty. That is 28% a year added to your tax liability.
In a Chapter 13 or Chapter 11, the interest is reduced to 3% or 4% (depending on the T Bill rate) and there are no penalties. This is a substantial savings and enables you to pay off your taxes in 5 years instead of living with the liability forever.
So ignore anyone who tells you bankruptcy cannot help with your taxes. They are just wrong. In most cases we can wipe them out but at the lease make payments feasible.