Can You Discharge Tax Debt when There’s a Business Involved?
It can be complex to close a business with the many tax implications involved. However, if you are thinking of closing a business that is struggling financially, you may owe income taxes. If this is the case, you have a couple of options:
- You can file for Chapter 7. Chapter 7 will allow you to write off eligible business debts. This can include older business tax debts and current business tax debts which meet certain criteria. Any taxes which are not dischargeable will likely have to be paid in monthly installments.
- You can file for Chapter 13. Chapter 13 essentially restructures your debt. Our tax debt lawyer would help you develop a three-to-five year repayment plan, which could include the discharge of your older business tax debt. During this time, you would be protected from collection actions from the IRS and other creditors.
Planning for Bankruptcy
If you are contemplating bankruptcy, it is important to know that a good plan can save time, effort and money. You must be aware of the bankruptcy rules and timelines before you file.
Being prepared will ensure you receive the greatest discharge of debts possible. The following strategies are sophisticated and are intended to be implemented by an attorney:
- WAIT the appropriate lengths of time prior to filing for bankruptcy.
- FILE any past-due tax returns as quickly as possible so the clock will begin running on those.
- STAY in compliance with your tax issues as much as possible going forward. This includes paying your current tax debt.
- AVOID tax fraud and evasion. Also avoid, whenever possible, “trust fund” taxes, particularly payroll taxes.
- BE AWARE of tax liens.
It is crucial that you request a tax transcript from the IRS for the tax years in question. Use IRS Form 4506-T. When you receive the tax transcript, have our experienced bankruptcy attorney review it. There are many “traps” in a tax transcript which can affect whether your tax debt is dischargeable.
Do I Need a Lawyer to File Bankruptcy?
Navigating the nuances, details, and pitfalls of bankruptcy law is not for amateurs or for “do-it-yourself.” Without the careful guidance of an experienced bankruptcy lawyer, there may be details about your case that can influence the outcome. Discharging tax debt in bankruptcy is not for everyone. If your tax debt cannot be discharged, our highly experienced tax debt attorney can assist you with an Offer in Compromise, Payment Plan to the IRS, or First-Time Penalty Tax Abatement. Your only concern should be protecting your future and family.
Questions About Tax Debt and Bankruptcy? Call Our Tax Debt Lawyer
If you find yourself dealing with overwhelming debt, accompanied by creditor collection actions, call our office. Our Palm Springs bankruptcy attorney can help you determine the most effective debt relief options. We can assess your unique situation, answer your questions, and build you a solid plan for your bankruptcy filing.
At the Law Offices of Robert L. Firth, we work with clients throughout the Coachella Valley, Imperial County, and the Inland Empire. If you have any doubt about the next step to solve your problems, call us to schedule a free consultation. We can explore your options to accomplish your goals.