IRS DEBT OPTION ANALYSIS
OVERVIEW AND FAQ
OVERVIEW - IRS DEBT OPTION ANALYSIS
Using bankruptcy law to resolve IRS debt…when it makes the most sense.
A “tax motivated” bankruptcy is one where the primary debt is tax debt, penalty and interest, or at least the primary reason for using bankruptcy as a solution, is tax debt. ncludes a substantial tax debt along with related interest and penalties. The tax debt can be any type of tax - income, sales, payroll, employment, or excise taxes. Our Tax Bankruptcy attorneys analyze every tax claim and examine its attributes to strategically eliminate or reduce them along with all other debt.
Bankruptcy can be a powerful way to eliminate qualifying IRS tax debts and other unsecured debts. providing significant relief for eligible individuals. However, its success depends on meeting stringent criteria for tax debt dischargeability and understanding the impact of tax liens or non-dischargeable taxes. Consulting a bankruptcy attorney is critical to navigate these complexities, assess eligibility, and maximize protections under exemption laws. For further details, resources like the IRS website (irs.gov) or legal aid services can provide guidance.
Our client’s hire us to ensure that they eliminate or otherwise reduce their tax claims to the greatest extent possible.
We Do What Matters Most
Focus on eliminating tax debt in bankruptcy – plain and simple. When it comes to eliminating tax claims in bankruptcy, there are complex statutory hurdles and judicial rules to navigate. We live and breathe tax-bankruptcy law and strategically plan each bankruptcy case to effectively resolve the tax debt. While most other bankruptcy law firms focus on bankruptcy and deal with the tax claims as an after-thought, we don’t.
DISCUSS WITH ATTORNEY
CLIENT COMMENTS
FAQ - IRS DEBT OPTION ANALYSIS
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How you “deal” with the IRS debt will depend on a number of things. Things like, how much the debt is, how old it is, what type of tax debt it is, your financia/income/assetl situation now and in the future, and your IRS history.
You may be a good candidate to “settle” the debt now or in the future. You may have to use some form of installment agreement first. An installment agreement may always be your best or only option. Bankruptcy may make sense.
In order to determine how you should deal with the debt with an eye toward getting rid of as much of it as possible, you will want to have an experienced & straightforward tax debt attorney review your IRS history and your financial situation. This will help you to see what your real options are now, what they may be in the future and what you need to do.
This analysis is key and many people just plunge into the “solution” step without understanding whether the solution they hope for is even available, making mistakes and paying too much for help as a result.
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Phone Call
The first step is to discuss your situation with me over the phone. I ask some questions in order to get an idea about the IRS debt history, your financials, and what your best option may be. The call is free.
IRS History and Financial Overview
Most clients sign an 8821 form that I submit to the IRS so that I can obtain “history transcripts” that give me information about collecton status, collection statute expiration dates, amounts, lien issues, bankruptcy information etc. I charge 450 - to submit this and obtain review the info. While I’m doing this most clients will print out and fill out a short worksheet- upload it to me and I’ll use that to ask more questions and more fully analyze options.
Phone Call - Analysis
Once I’ve reviewed the IRS history and taken a look at your financials - I discuss your options and my thoughts about which makes the most sense and why . Most clients are able to decide on “plan” during this call. The call is free.
Sometimes the plan doesn’t require my help - i.e. the client may just need to stay “still” and wait, or set up a “time-based” installment agreement which usually doesn’t require any help. Sometimes the plan is more complex and the cleint will want to hire me to represent them, provide guidance, etc.
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Generally a person has four options:
Challenge
If the debt is incorrect and it makes sense to do so - a client will often “challenge” the amount the IRS claims is owed. There are different ways to challenge an IRS debt amount and the way you do it will depend on what happened to cause the IRS to create the debt amount
Settle
Most people want to settle the debt for less in an IRS offer in compromise. (assuming the debt is substantially correct). However, convincing the IRS to “reduce” the debt amount isn’t a matter of simply picking a number and making an offer. It’s reliant on facts/situation and can get complicated.
Settlement includes payment plans that don’t pay the debt within the time frame the IRS has to collect the debt.
Whether you qualify for an offer, a Partial pay agreement has to be sorted out before you head down those paths - sometimes you aren’t a good candidate now for either but may be down the road.
BANKRUPT
Sometimes bankruptcy makes the most sense. It’s a last resort but it’s surprising how often it can really make a difference in the life of someone with a serious tax debt struggle combined with other debt problems.
FULL PAY
Most people end up in some sort of installment agreement with the IRS that full pays the debt. Many of these people use first time or reasonable cause penalty abatement requests to try and reduce the debt. It’s wise to have experienced counsel review and discuss your options before you use this as your option and it’s wise to fully analyze your options before you pay someone alot of money to try a bad offer in compromise only to end up in a full pay installment agreement.