IRS tax debt · Beverly Hills
IRS Tax Debt in Bankruptcy for Beverly Hills Taxpayers
IRS tax debt in bankruptcy can be wiped out when it meets certain timing rules, and the rest can often be paid over time in Chapter 13. If the IRS is garnishing your pay or levying your account, call (310) 362-9071 for a free consultation in Beverly Hills or by video.
- The return was due at least 3 years ago
- You filed it at least 2 years ago
- The tax was assessed at least 240 days ago
- No fraud or willful evasion
Which IRS debts bankruptcy can help with
Bankruptcy treats federal taxes by type and age. Older income taxes can often be discharged. Newer ones get priority treatment and can be paid through a Chapter 13 plan.
- Often dischargeable: older federal income taxes that meet all of the timing rules, plus related penalties.
- Usually payable in Chapter 13: recent income taxes, which are paid in full over the plan without new penalties.
- Never dischargeable: trust fund taxes, such as payroll taxes withheld from employees, and taxes from fraudulent returns.
How we handle IRS debt, step by step
- Get your transcripts. IRS account transcripts show when each return was filed and when each tax was assessed. Those dates decide the case.
- Sort the taxes. We sort each tax year into dischargeable, priority or nondischargeable.
- Check for liens. A recorded federal tax lien can stay attached to property even when the tax itself is discharged.
- Pick the chapter and timing. Sometimes waiting a few weeks lets another year qualify. We find the right filing date.
- File and stop collection. The filing stops IRS levies and garnishments while the case is open.
- Confirm the result. After discharge, we check that the IRS has adjusted your accounts.
Cost and timeline
Tax cases take extra review of transcripts and dates. You get our fee in writing at the consultation after we see your tax history.
IRS collection stops when we file. In Chapter 7, qualifying taxes are discharged in a few months. In Chapter 13, priority taxes are paid over the 3 to 5 year plan.
Tax cases in the Los Angeles Division
Cases from Beverly Hills and most of Los Angeles County are filed in the Los Angeles Division of the U.S. Bankruptcy Court, Central District of California, at 255 East Temple Street. The IRS files a proof of claim in the case, listing each tax year and whether it says the tax is secured, priority or general. We compare that claim to your transcripts and object to errors.
Many Los Angeles residents owe both the IRS and the California Franchise Tax Board. California follows different timing in some situations, so each agency is reviewed separately.
Mistakes to avoid
- Filing bankruptcy too early. One month can decide whether a tax year qualifies.
- Not filing old returns. Unfiled years cannot be discharged and can block a Chapter 13 plan.
- Paying taxes with a credit card. Card debt used to pay taxes that are not dischargeable is not dischargeable either.
- Ignoring an offer in compromise or audit. Either can extend the timing rules.
Related services
If you also owe the Franchise Tax Board, read about state tax debt in bankruptcy. If recent taxes need to be paid over time, see Chapter 13 bankruptcy in Beverly Hills.
IRS tax debt questions
Can bankruptcy wipe out IRS tax debt?
Yes, bankruptcy can wipe out some IRS tax debt. Older income taxes that meet the three-year, two-year and 240-day rules, with no fraud, can usually be discharged. Newer taxes and payroll trust fund taxes cannot.
Does bankruptcy stop an IRS levy?
Yes, filing bankruptcy stops an IRS levy or wage garnishment while the case is open. Whether the tax is later discharged or paid through a plan depends on the tax year.
What about a federal tax lien on my house?
A federal tax lien recorded before you file can stay on your property even if the personal debt is discharged. Chapter 13 can be used to deal with the lien. We check for liens before filing.
Do I have to file my missing tax returns first?
Yes, you usually need to file missing tax returns before your bankruptcy goes far. Chapter 13 requires the last four years of returns, and late returns can affect whether a tax is dischargeable.
Free consultation
Find out which taxes you can wipe out
Call (310) 362-9071 or send the form. If you have any IRS notices, have them ready.
Law Offices of John Asuncion9454 Wilshire Blvd., Penthouse Floor
Beverly Hills, CA 90212
(310) 362-9071
Monday to Friday, 9 a.m. to 6 p.m.