3 Things To Know About Getting Rid Of Tax Debt

Posted on: 8 April 2016

If the IRS is garnishing your wages for tax debt you owe, you might want to look into your options. A good way to start is by visiting a bankruptcy attorney that specializes in tax services. Your attorney can help you understand all the options you have, and he or she will help you select the option that is best for your situation. Here are several things you should know about eliminating the tax debts you owe.

Make Sure You File All Returns

The first thing your attorney might ask you is whether or not you have filed all your returns over the years. If you missed a particular year or have not filed your taxes for the most current year, you should begin your process by filing the taxes you need to file.

Depending on your situation, there is a chance that this could help you with the amount you owe. For example, if you overpaid your taxes for the year you missed, you might be expecting a large refund from the IRS. If so, this amount will automatically reduce the total tax bill you owe.

If filing your missing return will increase your tax debt, you should still file it. While this may increase the amount you owe, there is nothing you can do to get around filing. If the IRS detects you missed filing a return, they will file one on your behalf. Unfortunately, the IRS will only use the information they have when they file, and this may cause your tax liability to be a lot higher than what it should be had you been given the opportunity to take all the legal deductions and allowances on the return. This is called a substitute return. If you file after the IRS does this, your new return will override the substitute return.

Examine Your Current Financial Situation

The next thing the attorney may ask you about is your current financial situation. This may include answering the following questions:

  • Do you owe a lot of money for unsecured debts?
  • Do you have money in the bank?
  • Do you own any valuable assets that do not have loans?
  • Do you have a lot of equity in your home?
  • Do you make a lot of money?

These questions will help the attorney determine whether filing for bankruptcy would be a good option for you. If you do not make a large salary and do not have a lot of money or assets, filing for bankruptcy could be a good solution for your tax debt. If you have a lot of money in the bank, you will lose the money if you file. Instead of losing the money, your attorney might suggest using it to pay off your tax debt.

Create A Plan

If you meet certain conditions, you could wipe out the tax debt you owe through Chapter 7 bankruptcy. To qualify for this, the tax debt must be at least three years old and you must have all your returns filed with the IRS. There are several other conditions you must also meet, and your attorney can determine if you meet these. If you can use this option, the wage garnishment would stop as soon as your attorney files your bankruptcy paperwork. In addition, the tax debt would be forgiven, which means you would no longer owe the money.

Unfortunately, this is not always an option; however, there are others. One option is to have your attorney negotiate a settlement amount for the debt you owe. With this method, you could find relief from your debt by paying only a small portion of it.

If you want to stop the wage garnishment from the IRS and get rid of the tax debt you owe, there are options, but you will need to begin your quest by visiting a tax attorney in your city today.

For more information on tax law, contact a company like http://www.wflaw.net. 


Talking About Bankruptcy Attorney Services

Hi there, my name is Mac Deeland. Welcome to my site about bankruptcy attorneys. Bankruptcy saved me from having to pay nearly all of my monthly income to my growing debts. Due to high interest rates and huge credit balances, I was barely able to pay off the monthly interest alone with my income. Even working three jobs did not help me dig my way out of the hole I created. Luckily, I was able to work with a bankruptcy attorney to clear up my debts and start anew. I will use this site to help others take the same path of debt forgiveness by working with a bankruptcy attorney.