Bankruptcy & Tax Debt: Essential Knowledge

tax debtIf you’re filing for bankruptcy, chances are you have some tax debt issues.  While bankruptcy is a terrific way to discharge a many debts, from medical debt to credit card debt, your taxes are may not be included.

Although tax debts are generally not not possible to have discharged in bankrutpcy, there are still many options available to you!

What You Can Do

Don’t worry!  Bankruptcy is not the only way to eliminate debts.  Fortunately, the IRS offers several different programs and methods to help you pay off your tax debt rather painlessly.  The key to successfully getting rid of your tax debt is in being willing to cooperate!

Cooperation begins with forthrightness.  If you have any unresolved tax debt issues, it’s important that you go ahead and address them with the IRS.  Because the IRS is so strapped for cash right now, agents are more vigilant than ever about seeking out tax evaders.

Even if you have made no intentional efforts to evade taxes, your name could turn up because of an honest bookkeeping mistake.  Check all of your records with a tax attorney to be sure that you’re in the clear!

There are several programs you could take advantage of before or after you file for bankruptcy.  These include the Offer-in-Compromise program, in which you settle for less than what you owe, and an installment plan, in which you work with the IRS to determine a good payment schedule.

As you consider the bankruptcy process, be sure you look into these ways of eliminating your tax debt!

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