Do you owe taxes? Many who do find themselves facing federal income tax collections and incur penalties, fines, bank levies, or even tax liens when the IRS pursues collections. Did you know that some taxes can be eliminated and discharged through bankruptcy? Did you know that bankruptcy can potentially remove tax liens?
There are Five (5) general rules required to discharge IRS taxes in bankruptcy.
A tax lien, once recorded, adds tremendous complication to the subject of tax discharge in bankruptcy. It’s not impossible, but requires a skilled attorney to analyze and resolve the tax issues. A skilled bankruptcy lawyer understands that liens generally survive a bankruptcy, giving rights to the “secured” creditor to continue collecting on their lien rights, after bankruptcy. Even if the underlying tax debt is dischargeable, ignoring tax liens can have problematic consequences for the debtor after discharge.
Attorney analysis is required to determine the extent of income tax liability, whether liens were recorded and what solutions is right for the individual taxpayor. A tax discharge bankruptcy might be right for taxpayors who owe enough delinquent taxes to cause him/her trouble and sleepless nights. Be prepared to pay an additional fee to the attorney for a proper analysis and determination of whether taxes can be discharged in bankruptcy.