Many bankruptcy cases also have a considerable amount of tax debt attached to them. But, the bankruptcy courts can’t discharge federal tax debt. In fact, no bankruptcy courts can. If you owe money to the IRS… then you owe money to the IRS. There’s no way around that one. However, that doesn’t mean that you’re stuck paying your full tax debt. Let’s go over a few of the options you have for settling your tax debt at less than what you owe…
Tax Debt Settlement Options
The IRS wants to get the money that it’s owed. However, the IRS has made this more feasible for tax debtors by developing several programs to work with your unique situation.
One of the most intensive programs the IRS offers is the Offer-in-Compromise program. Through this program, tax debtors can settle for less than the full amount of their tax debt. Be forewarned that you will end up disclosing a lot of detailed financial information to the IRS. Everything from your income to expenses to net worth will be disclosed. Gathering all of this information accurately and efficiently may require the services of a CPA.
Another popular method of resolving tax debt issues is through an IRS installment agreement. This method is slightly less involved than the Offer-in-Compromise program and is a great way for anyone facing Dallas bankruptcy to resolve their tax issues – which the courts cannot take care of!