Bankruptcy and the I.R.S
Remember that the only time you can
discharge your taxes with the IRS is if you filed them on
time and are more than three years old as a general rule. I
get the call at least once a month people asking me about
back taxes and if they could discharge them. And most of
the time the answer is no because they didn’t file them on
time or filed them recently. So what is your next option
before filing or planning a bankruptcy?
Offer in
Compromise
An offer in compromise is when the IRS
accepts less than what you owe, there are three grounds to
for an offer in compromise:
A question as to whether or not you owe actually owe the
money
A question as to whether or not you have the ability to pay
what you owe
Showing hardship and unfair circumstances by requiring you
to pay it in full
If you qualify with one of the above grounds the IRS is
going to look at your assets and your future earning
ability. They would potentially calculate all that you owe
and or your earning ability and figure out what you could
pay them if you sold your assets within a 90 day period. If
you can’t pay it within 90 days you can request up to two
years to pay it, but then they will increase the amount of
what they think you can pay in 60 months. The above is just
a summary on an offer in compromise, detailed information
on taxes and bankruptcy regarding time limits will be
covered in our chapter 7 and chapter 13 topics.