- Knowing the rules of tax discharge in bankruptcy gives an attorney an advantage when negotiating with the IRS.
- One of the criteria in the IRS employee manual when considering an OIC is “To Determine What The Effects Of Bankruptcy Would Be In Analyzing The Settlement Potential.”
- Numerous OIC’s Have Settled solely on the Threat of Bankruptcy.
REQUIREMENTS TO DISCHARGE TAXES IN CHAPTER 7
- Taxes which do not meet the test for discharge.
- Less than 3 years old, or
- Less than 2 years since the return was filed, or
- Less than 240 days since assessed, or
- Payroll withholding taxes.
- MUST BE PAID IN FULL THROUGH CHAPTER 13; (WITHOUT INTEREST)
- Non-dischargeable in Chapter 7
- PENALTIES ARE NOT TREATED AS PRIORITY TAXES; THEY ARE TREATED AS GENERAL UNSECURED CLAIMS.
- ONLY THE ACTUAL TAX, PLUS THE INTEREST THAT ACCRUED UP TO THE DATE OF FILING MUST BE PAID THROUGH THE PLAN.
SECURED TAX CLAIM
- IRS has filed a valid tax lien.
- The secured portion of the claim is only up to the value of the debtor’s property, without any deduction for the exemptions which the debtor could otherwise claim.
- THERE IS A MOTIVATION TO GET THE BANKRUPTCY FILED BEFORE A TAX LIEN IS FILED.
UNSECURED GENERAL CLAIMS
- Tax is treated the same as any other general unsecured debt.
- Payroll taxes are trust fund taxes and NOT SUBJECT TO BANKRUPTCY DISCHARGE.
- If the sales tax is a tax on the BUYER, IT IS TREATED WITH THE SAME RULES AS NORMAL INCOME TAX.
- COLLECTION DIVISION OF THE IRS (SEVERAL BRANCHES)
- REVENUE OFFICERS
- POWERS OF ATTORNEY
- REQUESTING TRANSCRIPTS (3 BASIC TYPES)
- OFFERS IN COMPROMISE (OIC)
- THREE BASICS FOR AN OIC
- OFFERS BASED UPON DOUBT AS TO COLLECTIBILITY
- FORM 433 COLLECTION INFORMATION STATEMENT
- LUMP SUM CASH OFFER
- PERIODIC PAYMENT
- REMAINING STATUTE OF LIMITATIONS OFFER
- ITEMS TO INCLUDE WITH OIC
- SUBMITTING THE OFFER
- WHAT TO EXPECT AFTER FILING THE OIC
- DISCHARGING TAXES IN BANKRUPTCY AFTER REFORM
- TAX CLAIMS IN BANKRUPTCY
- LIENS AND CHAPTER 7
- ADVANCED HANDLING OF OIC AND BANKRUPTCY
- NON-LIABLE SPOUSE’S INVOLVEMENT
- LEVY RELEASES
- NON-COLLECTIBLE STATUS
- TYPES OF APPEALS
- COLLECTION APPEALS PROGRAM (CAP)
- INSTALLMENT AGREEMENTS (IA)
- PENALTY ABATEMENT