Bankruptcy can be a challenging and stressful process, especially when you’re dealing with tax-related issues. If you’re considering filing for bankruptcy in California, you need the help of an experienced bankruptcy tax attorney. Tax issues can significantly complicate the bankruptcy process and create a range of legal and financial challenges. A knowledgeable attorney can provide the guidance and support you need to navigate this complex area of the law. Whether you’re dealing with unpaid taxes, tax liens, or other tax-related issues.
From navigating state and federal tax laws to protecting your assets, a skilled attorney can help you achieve a fresh start and move forward with confidence. So, let’s dive in and explore why you need a bankruptcy tax attorney in California.
IRS Collection and Discharge of Tax
An experienced tax attorney will determine how much of your tax debt is dischargeable. Tenina Law will help you determine whether your tax debt can be discharged based on the amount and type of tax due. As well as the date the tax returns were filed and the time the IRS or state last assessed the tax. Tenina Law may also be able to structure a Chapter 13 payment plan that allows you to pay the non-dischargeable tax interest and penalties free of charge (from the date of bankruptcy filing). We can negotiate with the IRS and the state of California to reduce Priority and Nonpriority tax debts, stop tax garnishments and file an Offer in Compromise (requesting a partial abatement or reduction of non-dischargeable taxes liability) simultaneously with Chapters 7 and 13.
Debtors in Chapter 7 or Chapter 13 want as much as possible of their tax refund. To help you save as much money as possible, our office will examine your income tax withholdings and exemptions to determine if bankruptcy is an option. A trustee cannot usually take the tax refund due to a spouse who is not filing.
Representation for Small Business Owners
Many of our clients are sole proprietors or business owners who have formed an LLC or S-Corp. Small business owners have to deal with payroll and withholding issues, unlike W-2 employees who get a paycheck. Tenina Law will help you calculate your gross income by taking deductions from your disposable income. This will allow you to determine the tax that you must pay to the IRS and any localities. Tenina Law can help you determine how much income and deductions to claim. A business structure that allows for as little tax as legal will allow a debtor to have more financial flexibility to spend the money as he pleases. This is also a way to give the debtor the ability to contribute to a retirement plan.
A tax attorney representing bankruptcy creditors is the best qualified to legally protect assets against creditors and trustees. Tenina Law is going to aggressively use the California exemption laws to make sure that creditors can only liquidate as little of their property. Clients who have assets such as real property or investments with built-in capital gains need to consider how they can best protect their value. Tenina Law can also help with divorce proceedings, whether filed before or after bankruptcy. They offer advice on how to transfer real and personal property regardless of whether it was ordered by a divorce judge.
Surrender of Real Estate
Many clients involuntarily or voluntarily give their property to the mortgage lender. Although bankruptcy is almost always able to discharge the mortgage deficiency, many clients receive Form 1099A and 1099COD from their lender. Many clients are not sure about the tax consequences. Tenina Law can advise you on any tax issues related to the surrendering of your home.
Is Bankruptcy the Best Choice?
Understanding and acknowledging the amount and types of debt is essential before you decide to file for bankruptcy. Filing for bankruptcy can provide relief for federal taxes owed. This includes the stop or delay of the IRS’s ongoing collection efforts. In some cases, the complete elimination of tax debts.
It is important to consult with an experienced tax/bankruptcy lawyer as part of the decision-making process. Tenina Law works with clients to discuss and give an understanding of the bankruptcy process and its ramifications. We also review all financial issues to determine if bankruptcy is the best option. Our team can help taxpayers look into other options for reducing tax debt if bankruptcy is not an option.
Is It Possible to Eliminate Tax Debts Through Bankruptcy
Bankruptcy allows the debtor to erase or reduce various personal and business debts. This includes most credit card debt and certain federal tax debts. The specific facts of each case and multiple factors will determine whether or not tax obligations can be discharged by bankruptcy. It is important to understand how bankruptcy might affect tax debt.
What Is the Best Type of Bankruptcy?
It will play a significant role in whether or not any tax debt is discharged. If one meets the requirements, Chapter 7 or Chapter 13 bankruptcy allows you to clear tax debts without the need for a repayment plan. Chapter 13 allows for a personal or company reorganization of debts by the implementation of a repayment plan that pays priority tax debt in full over the term of the plan. A Chapter 13 bankruptcy may allow the discharge of non-priority taxes if certain conditions are met. It is crucial to understand whether a tax debt has priority under the bankruptcy code.
Types of Tax Debt
What tax debts can be discharged through bankruptcy? In general, bankruptcy is only applicable to income tax debts. Tax debts relating to payroll taxes, FICA (Social Security), and trust fund taxes cannot be discharged in bankruptcy proceedings, even Chapter 7. This exception may be narrow. A sales tax debt that was owed for payroll taxes, FICA (Social Security) taxes, and trust fund taxes cannot be discharged through any type of bankruptcy proceeding, including Chapter 7.
Was Fraud Involved?
A taxpayer who willfully files a fraudulent or misleading tax return or avoids filing the required forms, such as an FBAR, to declare foreign-based earnings or income, will not be eligible to reduce or eliminate debt through bankruptcy. A bankruptcy filing will not allow you to pay any fraud penalty imposed by the IRS or Franchise Tax Board.
Willful conduct can include intentionally not reporting income or underreporting it and claiming tax deductions that the taxpayer isn’t eligible to claim. Noting that if a taxpayer falsifies their intent to conceal income, they could face additional penalties and/or criminal charges.
Don’t Navigate Bankruptcy Alone: Hire a Bankruptcy Tax Attorney Today
Are you considering bankruptcy? Dealing with taxes and bankruptcy can be complicated and confusing, which is why it’s important to hire a bankruptcy tax attorney. At Tenina Law, we understand the nuances of bankruptcy and tax law and can help you navigate the process with ease. Our experienced attorney will work with you to protect your finances and assets, avoid costly mistakes, and find relief from your debts.
Don’t let the IRS take your hard-earned money – hire a bankruptcy tax attorney to represent you and advocate for your best interests. Contact us today to learn more about how we can help you achieve a fresh financial start.