Information About Tax Debt Relief
When individuals are delinquent on tax debts owed to the federal government, the I.R.S. has many weapons in its arsenal to collect those taxes. The I.R.S. may file federal tax liens, garnishments, levies, and utilize private debt collectors, all in an attempt to collect the liability. If you have a serious tax problem, and you need to protect yourself and your property, you need attorneys who are experienced in two worlds, tax and bankruptcy. The attorneys at Tully Rinckey, PLLC have that experience.
The attorneys at Tully Rinckey, PLLC will help you identify the best possible solution to your federal tax obligations. We have helped individuals resolve their tax debt through negotiated payment plans, innocent spouse relief petitions, offers in compromise, bankruptcy, and other forms of relief. Our lawyers have even obtained favorable results for individuals, through the appeal process, where tax payers tried to resolve the delinquency on their own and failed.
Offer in Compromise
If you owe back taxes to the I.R.S., the attorneys at Tully Rinckey, PLLC will work to permanently resolve your debt by negotiating an offer in compromise. The I.R.S. offer in compromise program is designed for individuals who are incapable of paying off their tax debt in full. Often times, the offer in compromise tax settlement amounts to pennies of the dollar of your tax debt.
In order for an offer in compromise to be accepted, you must file all delinquent tax returns. If you propose a lump sum settlement payment, you will need to pay 20% of that amount when the application is filed. If you propose an installment plan, you will need to send the first payment with the application. Even if your offer is rejected by the I.R.S., the money you advanced with the application will not be refunded as it will be considered to be a payment towards the tax debt you owe.
It is critical that you consult with a tax professional to analyze your current financial situation, your previous tax returns, and other records. By determining exactly how much you owe the I.R.S., the attorneys at Tully Rinckey, PLLC can enhance the likelihood that you are not obligating yourself to pay even one penny more than what you owe.
Many people mistakenly believe that federal income taxes are never dischargeable (eliminated) in a bankruptcy. This myth is wrong; bankruptcy relief is often the best way to solve a serious tax problem and stop ongoing collection activity. The filing of a bankruptcy case automatically and immediately stop I.R.S. bank account levies and wage garnishments, and enables the tax payer to either obtain a discharge or to reorganize tax liabilities.
Only individuals, not businesses, can discharge certain taxes through bankruptcy. The only tax eligible for discharge is federal income tax. Bankruptcy offers no relief from taxes for which the debtor/taxpayer was personally responsible for collecting taxes from other individuals, such as F.I.C.A. withholding tax from employees. Bankruptcy can not relieve liability for excise taxes such as estate and gift tax, sales tax, or fuel tax.
Generally, the Bankruptcy Code allows individuals to discharge an income tax if all of the following requirements are met:
- The tax return related to the debt was filed more than two (2) years before the bankruptcy filing;
- The tax return was due more than three (3) years before the bankruptcy filing;
- The tax liability was assessed more than 240 days before the bankruptcy filing; and
- The taxpayer did not file a fraudulent tax return or engage in tax fraud or evasion.
The bankruptcy discharge of a personal income tax liability is primarily governed by the lapse of different time periods from the tax return due date, the actual return filing date, the tax assessment date, and the date of the taxpayer’s bankruptcy filing date. Once all of these time periods have expired, a tax liability can change from a non-dischargeable “priority tax” into a “non-priority tax” that, in most cases, may be dischargeable in a bankruptcy case.
Unfortunately, calculation of the beginning and end of the time period rules is not simple and requires professional experience in reviewing and interpreting I.R.S. records. The running of the time periods can be extended (or tolled) by many different events. For example, a prior bankruptcy, an offer in compromise, or a Collection Due Process Appeal will toll the run of certain time periods. The numerous time period limitations for tax collection and bankruptcy discharge, and the occurrence of events which may toll the running of these limitation periods, are the most important factors in planning for an implementing strategies to solve and discharge an individual’s delinquent tax obligations.
Speak With Us
If you have significant federal tax liabilities, it is imperative that you seek knowledgeable tax and legal counsel. The team of experienced and knowledgeable attorneys at Tully Rinckey PLLC will work on your behalf to obtain the best possible relief from your I.R.S. tax liability. We have worked with individuals who sought to have tax debts discharged through bankruptcy. Our lawyers have explored and pursued alternative means of resolution through direct negotiations with the I.R.S., and utilizing the numerous programs it offers. We have also worked with small businesses that sought assistance with the resolution of excise tax debt, such as sales tax and employee withholding. The attorneys of Tully Rinckey PLLC have the experience to knowledgeably review your tax situation and help you determine what the right step is for you.
The most popular City / Village / Town Courts our lawyers serve:
Albany, Altamont, Amsterdam, Berne, Bethlehem, Brunswick, Clifton Park, Cohoes, Colonie, Coeymans, Delaware, Duanesburg, East Greenbush, Fulton, Glens Falls, Glenville, Gloversville, Grafton, Greene, Guilderland, Hoosick, Hudson, Johnstown, Malta, Mechanicville, Menands, Montgomery, Nassau, New Scotland, Rensselaer, Rensselaerville, Rotterdam, Saratoga, Schenectady, Schoharie, Schodack, Scotia, Troy, Ulster, Voorheesville, Warren, Washington, Watervliet
24 hours a day, 7 days a week
“Thank you for helping me with my Real Estate needs. I will be using your Law Firm in the near future to write out my will.” - M.W. on Partner Graig Zappia
Lincy Jacob was dedicated to my case. I was treated with respect at all times. I was made to feel as if I was one of her most important clients. She was highly professional, committed and showed compassion for my …
“He was very attentive, took notes, and re-addressed our main issues several times. He gave us three or four options and we talked through them all, prioritized, and executed. Remarkably, he answered his own phone most of the time.” - …
By Matthew Daneman It looks like a magic trick. A sheet of ordinary office paper rotates rapidly on a spinning drum. In literally the blink of an eye, the sheet is covered in black text, using drops of ink measured …
By Matthew Daneman Kodak, in Chapter 11 bankruptcy for the past 20 months, is expected to officially emerge from bankruptcy Tuesday. That emergence — approved by U.S. Bankruptcy Court last month — triggers a slew of major events for the …
Tully Rinckey PLLC bankruptcy law attorney Robert Rock, Esq., answered listener questions on WGNA’s “Ask the Lawyer.” Mr. Rock addresses Chapter 7 bankruptcy eligibility and how bankruptcy affects car ownership and joint credit card debt.
Presenter: Robert J. Rock, Esq. Date: June 25, 2013 Time: 6:00-7:00 p.m. Skills: 1 CLE Credit Hour Click here to view Jennifer’s biography. Unable to join us in Albany? Join us online via webconference. *Please note that newly admitted attorneys …