Jacksonville Tax Debt Lawyer
We all know the old saying, and it is a fact that will likely never change: Taxes are inevitable. Most people pay more money to the government than to any other single party. Falling behind on your taxes can be one of the most difficult financial struggles to deal with. Options for relief from tax debt are more limited, and the penalties for failure to pay can be more severe. However, the picture need not be so grim; some myths about tax debt are simply untrue. For example, some tax debt is dischargeable in bankruptcy, contrary to popular belief.
If you are dealing with mounds of back taxes, reach out to a knowledgeable and dedicated Jacksonville tax debt relief lawyer at Albaugh Law Firm for advice and representation. We will help you work toward a brighter financial future, no matter the type of debt you face.
Discharging Tax Debt in Bankruptcy
There is a common misconception that tax debt is not dischargeable in bankruptcy. While that is true to a certain extent, a large portion of tax debts does actually qualify for discharge. In fact, qualifying tax debts may be either included in a Chapter 13 reorganization plan or discharged as part of a Chapter 7 bankruptcy.
In order for tax debt to be dischargeable, it must meet certain criteria:
- The debt must be at least three years old
- The relevant tax returns must have been filed at least two years in advance of filing for bankruptcy
- The tax assessment must have been completed at least 240 days prior to filing for bankruptcy
- The bankruptcy petitioner must not have been engaged in any sort of tax fraud or tax evasion scheme
If you are filing under Chapter 7, tax debt that meets all of those criteria will be incorporated into the bankruptcy proceeding, and any remaining unpaid portion will be discharged. If you are filing under Chapter 13, any tax debt that meets the above criteria will be considered non-priority, unsecured debt. That means that you will make regular payments to the IRS as part of your repayment plan, as you would any other creditor. Any tax debt that remains at the end of your repayment period will be wiped clean with all the other unsecured debt.
Even if your tax debt is not dischargeable, you might be able to reduce your tax burden by creating a tax repayment plan. With the right repayment plan in place, you reduce or avoid IRS penalties and secure a lower interest rate than would be charged by the IRS.
Non-Dischargeable Tax Debt
Certain types of tax debt are never dischargeable, whether in Chapter 7 or Chapter 13. Non-dischargeable tax debt includes:
- Tax liens. If a tax lien were recorded before you filed for bankruptcy, the bankruptcy would not lift that lien. Your property may be repossessed, although you will not be personally liable.
- Property taxes. Property taxes that you incurred in the year before your bankruptcy are not dischargeable. If there is a tax lien on your property, the debt is treated as secured.
- Taxes you were required to collect or withhold.
Act Now to Stop the IRS
If you receive a notice from the IRS about back taxes, it is important to act as soon as possible to resolve the situation. The IRS is vicious and relentless. They will pursue all collection means at their disposal, and they cannot be avoided. If you have past-due tax debt, you might face aggressive collection efforts such as wage garnishment.
Wage garnishment is the process by which a creditor can get direct access to your paycheck to collect on the debt that you owe. Most creditors must get a judgment from the court in order to start garnishing wages. Unfortunately, the government is not so limited. They can start garnishing your wages once they determine that you owe back taxes.
Do not wait to start pursuing your tax debt relief options. Call a Jacksonville tax debt relief lawyer at Albaugh Law Firm as soon as possible for a free evaluation, and let us see how we can help you resolve your tax debt issues.
Get Help From Seasoned and Knowledgeable Tax Debt Attorneys
If you are dealing with significant back taxes or other individual debt and looking for a way forward, the compassionate and effective Jacksonville debt relief lawyers at Albaugh Law Firm are ready to help. We offer free consultations for debt relief clients, serving clients facing all types of debt. Our tax debt and bankruptcy legal team will review your financial situation, help you identify and consider your options for debt relief, and work with you to obtain the best outcome for you and your family. Contact our Florida bankruptcy attorneys at 904-471-3434 today for a free consultation.