Tax Issues

I Received an IRS Notice of Intent to Levy: What Should I Do Next?

12/21/11

Letter 1058 Precedes an IRS Levy The IRS seizes or levies property from taxpayers who owe back taxes. It is through the levy process that the IRS garnishes wages, seizes a car or attaches other items of property. Many taxpayers are frightened by notice of an IRS lien, however, tax liens only serve to put the world [...]

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What are the Tax Consequences of Not Filing for Bankruptcy?

11/18/11

Debts discharged in bankruptcy do not trigger tax liability Most everyone knows that filing for bankruptcy eliminates credit card debt, medical bills and other unsecured loans. However, a significant benefit of filing, that is rarely discussed, are the tax benefits that result when the bankruptcy discharge is issued. The IRS treats canceled debt as income [...]

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Some Debts That Bankruptcy Won’t Eliminate

09/20/11

The Limits of Bankruptcy Relief Under the right circumstances, filing for bankruptcy can provide great relief to a family or an individual struggling with debt. Assuming you qualify, chapter 7 bankruptcy can completely eliminate credit card debt, medical bills and afford an opportunity to get out from under a troubled mortgage. However, bankruptcy relief is [...]

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In re: ELIZABETH KATHERINE LOVING, Debtor. ELIZABETH KATHERINE LOVING, Plaintiff, v. UNITED STATES OF AMERICA, Defendant

09/06/11

Attorney, Mobile, Alabama Arthur P. Clarke, Attorney for the Debtor, Mobile, Alabama In re: ELIZABETH KATHERINE LOVING, Debtor. ELIZABETH KATHERINE LOVING, Plaintiff, v. UNITED STATES OF AMERICA, Defendant. Case No.: 11-01439-MAM-7 Adv. Proc. No.: 11-00141 UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF ALABAMA MOBILE DIVISION Dated: August 29, 2011 ORDER GRANTING MOTION FOR SUMMARY JUDGMENT [...]

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Discharge of Tax debt in Bankruptcy: 3 time rules to remember

09/06/11

To be able to discharge a tax debt, the tax needs to be older than 3 years, correct? I think this what normally people including myself normally remember about discharging taxes.  Let’s see on a recent case: 4.8.11 client filed bankruptcy hoping to discharge 2007 income tax. Correct or not? Well, there are full three [...]

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Can You Live on $182.69 Per Week?

08/28/11

IRS Wage Garnishment Packs a Punch Both debtor’s attorneys and debtors themselves often complain about the chapter 13 bankruptcy requirement that all disposable income be committed to the chapter 13 repayment plan. In fact, some bankruptcy lawyers have described chapter 13 as “financial purgatory.” They’re obviously not used to dealing with the IRS. When the [...]

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What is an Offer in Compromise? Can It Help Me Avoid Bankruptcy?

08/08/11

What is an Offer in Compromise? Tax settlement firms love to advertise the offer in compromise, a method for resolving IRS back taxes that theoretically involves payment of a small portion of the outstanding tax bill owed and forgiveness of the rest. Firms like Tax Masters love to imply that the IRS will simply forgive [...]

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IRS Tax Liens: What Every Taxpayer Needs to Know

07/25/11

An IRS lien is a federal tax lien (FTL) that the IRS places against your property, similar to a mortgage on your home or a lien on your car. The difference is that the lien is placed against everything you (the taxpayer) own, right down to the cash in your wallet, clothing, and furniture in [...]

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Bankruptcy Filing: Some Tax Consequences

07/09/11

If I received a 1099 from a Creditor After My Bankruptcy Case is Completed:  Is this Taxable Income? I’m often asked this question by my clients around tax-time as to what effect does their bankruptcy have, if any, on their income taxes.    The exact question is whether or not debts discharged (forgiven) in a bankruptcy [...]

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What to do if a creditor sends you a Form 1099 trying to make income out of your discharged debt

06/22/11

Creditors who were discharged in bankruptcy are not supposed to send you 1099 forms because a bankruptcy discharge is not a taxable event.  Some do it in and out of bankruptcy in order to get you to pay a debt.  I think it is a violation of the automatic stay if done during the bankruptcy [...]

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