Tax debts in bankruptcy are a weighty and serious topic. Statistics show that in 2019, over 770,000 individuals filed for bankruptcy in the United States, and approximately one-third of those involved some type of tax debt. This highlights the common struggle individuals face in paying their tax obligations. Bankruptcy is a common method for resolving…
Category: Bankruptcy Tax
Bankruptcy Tax
Tax issues that arise in bankruptcy cases, including dischargeability of tax debts and tax treatment of bankruptcy proceedings. Give us a call to see how we can help, (713) 909-4906.
Aggressive State Tax Collections
If you owe back taxes, the general rule is that you pay the state and then negotiate with the IRS. The reason for this is that the states are particularly aggressive when it comes to collecting back taxes. Some states are more aggressive than others. And their practices vary over time. In the event of…
Prepaying Taxes Before Bankruptcy Filing
Unlike tax laws that establish a specific amount due, bankruptcy laws define what is not due. These conflicting policy objectives can lead to unique outcomes in cases of unpaid taxes. For instance, what happens to taxes held by the IRS but not yet applied to a future tax liability when a taxpayer overpays their taxes…
Bankruptcy Filing Does Not Prevent Innocent Spouse Relief
There are often times when different government agencies with different clients and missions are at odds with one another. This is frequently true when it comes to the IRS and the bankruptcy trustee. The IRS is tasked with protecting the government fisc. The bankruptcy trustee is tasked with protecting the estate for the benefit of…
What to Do When the IRS Refuses to Recognize a Bankruptcy Discharge
What happens if the IRS fails to recognize a bankruptcy discharge for taxes? What can taxpayers do if the IRS violates the law in trying to collect a discharged tax debt? These are important questions that have a significant impact on taxpayers’ rights and financial well-being. Fortunately, there is a remedy. In the recent case…
Tax Aspect of the Bankruptcy Abuse Prevention & Consumer Protection Act
The Bankruptcy Abuse Prevention and Consumer Protection Act (“BAPCPA”) was enacted by Congress to address the perceived bankruptcy abuses. The law made significant changes to the bankruptcy code, including new eligibility requirements, mandatory credit counseling, and the creation of the means test. While BAPCPA was primarily aimed at addressing bankruptcy-related issues, it also had significant…
Can Bankruptcy Court Order IRS to Consider an OIC?
Have you ever found yourself in a situation where you were recognized as an expert, provided guidance or input on a matter, but then had a third party reach a different conclusion? If not, try to imagine yourself in such a situation. How would you react? Would you feel like your expertise had been undermined,…