Bankruptcy relief is an oft-used method to combat serious tax issues and halt IRS collection activity. Filing a bankruptcy case automatically and immediately stops bank account levies and wage garnishments, and allows the taxpayer to either obtain a discharge or reorganize his or her tax liabilities.
The attorneys of Ortiz & Gosalia, PLLC, assist clients with filing for bankruptcy — including Chapter 7 and Chapter 13 bankruptcy — and provide advice with regard to the tax consequences of bankruptcy.
Generally, the Bankruptcy Code allows an individual to discharge income tax if all of the following requirements are met:
Once these time periods have expired, the liability will become, in most cases, dischargeable by the bankruptcy court. However, these time periods can be extended by a number of different events including a prior bankruptcy that extends the two-year filing and three-year due date periods or an offer in compromise extends the 240-day assessment period.
If the taxpayer has received a Notice of Federal Tax Lien, the bankruptcy matter will be more complicated since the lien attaches to all of the taxpayer’s real and personal property and must be considered in a bankruptcy filing. Therefore, if a taxpayer receives such a notice, they should seek knowledgeable counsel for assistance.
We welcome you to contact Ortiz & Gosalia with regard to your bankruptcy or tax matter. Call us at (425) 633-2004, send an email to firstname.lastname@example.org, or use our online form. With Seattle area offices in Redmond, Bellevue and Kirkland, we serve clients throughout Washington State as well as those located internationally or in other U.S. states.