There are numerous ways to deal with tax debt – programs that may reduce, eliminate or provide for payment arrangements with the IRS or state agencies or possible Chapter 7 or Chapter 13 bankruptcy.
There are a lot of factors to be considered. Were your taxes filed on time? Where they filed more than 3 yrs ago? What type of taxes do you owe? What is the current status of the debt? Have you filed ALL your tax returns that are due as of now or do you have an extension properly filed and in place?
The main thing you need to understand is that you don’t go to jail for not paying your taxes – you go to jail for not FILING your tax returns. File the papers! It’s important to note that all required tax returns must be filed with the IRS before you can file bankruptcy. There are options for dealing with the debt if you end up owing. But bankruptcy cannot be an option if you have not filed your returns – and that can be a significant loss of an option to dealing with this type of debt.
Some taxes can be wiped out in bankruptcy and others that cannot be wiped out can be paid through bankruptcy. If they are taxes that you must pay, bankruptcy can stretch out the payments for up to 5 yrs when the IRS most often only offers 2 yr payment plans. Also, bankruptcy stops the penalties and interest during your repayment period! That is a huge benefit – especially if you owe a substantial amount in taxes. Penalties and interest rack up so quickly on this type of debt.
The best thing you can do is to talk to me about your specific situation – and talk to me as soon as you’re aware you have a tax debt situation. I’m happy to answer all your questions – the above is just the tip of the iceberg. Let’s get a plan in place to deal with your tax debt today!