Real Facts About Back Taxes Help and Bankruptcy
Back taxes help can be very confusing, especially if you are receiving conflicting messages from different outlets such as friends, internet, and professionals giving back taxes help. By researching the facts, you can distinguish the truthful back taxes help information from false tips.
You may have questions about the best way to get back taxes help, but with many misconceptions swirling around the internet, you may not find the correct answers. Below, we address the most common questions taxpayers have about back taxes help and the IRS.
- Will declaring Bankruptcy give me the back taxes help I need?
- What do I need to know about the Statute of Limitations?
To be clear, Bankruptcy should not be your first choice for back taxes help, as it's not a very common resolution. Both Chapters 7 and 13 treat tax debt the same, but not all tax debts can be discharged. There are specific bankruptcy rules that your tax debt must meet in order to be eligible for discharge. If your tax debt does not meet all five requirements, then bankruptcy will not provide the back taxes help you need.
- The tax return due date is at least three years old.
The tax return due date has to be at least three years from the date you file for bankruptcy.
- The tax return was filed no sooner than two years ago.
You are not allowed to discharge tax debts from unfiled returns or tax debts from the current tax year. The tax return should be filed at least two years before you file for bankruptcy.
- The tax debt was assessed more than 240 days ago.
Your IRS tax debt should be at least 8 months or 240 days old, whichever is longer, before you file for bankruptcy.
- The tax return is not found to be fraudulent.
If the IRS assesses a tax debt because of a fraudulent or frivolous claim on your tax return, that tax debt is not eligible for discharge through bankruptcy.
- The taxpayer cannot be found guilty of tax evasion.
Tax debt as a result of a criminal conviction of tax evasion is not eligible to include in bankruptcy.
There are other stipulations that may prevent you from using bankruptcy as a way to get back taxes help, such as your tax filing compliance. The IRS will not allow your tax debt to be discharged if you have not filed tax returns for the last four years. You will also need all the same tax documents as with any back taxes help program you apply for. Again, bankruptcy should not be the first choice for anyone looking for back taxes help unless you are certain you meet all the above criteria.
Statute of Limitations Facts
The IRS has 10 years from the day of your tax debt assessment to collect from you. Once your statute of limitations has expired, all collection actions taken against you must stop. However the clock can be paused, which extends the period under the statute over 10 years. Filing for bankruptcy protection without your tax debt included will stop your statute of limitations, but once you are out of bankruptcy, the clock resumes and all collection actions can begin again as well. Also, if you decide to seek an Offer in Compromise as a way to get back taxes help, remember during the review of your OIC application, your statute of limitations stops and will resume once the IRS makes their decision.
When seeking back taxes help, it is important to have all the facts about your tax resolution options. Many taxpayers are misled into thinking that a bankruptcy will provide the back taxes help they are looking for, when in reality they do not qualify. This applies to the statute of limitations as well. Some taxpayers believe their tax debt is under a seven-year collection clock, or their limitation clock never stops, or that the time starts from the due date of the tax return. These beliefs are all false, and could get you into even more trouble with the IRS.
If you need back taxes help, find a tax professional today that can guide you in the right direction to resolve your tax debt once and for all. The IRS has many back taxes help options for different situations, but it is up to you to find the one that suits you the best. We can put you in contact with highly respected back taxes help professionals to help you prepare your IRS documentation and to negotiate a tax debt settlement on your behalf. Call us now, or fill out the form, to get started. Do not be misled about tax debt relief, get the facts about back taxes help today!