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Tax Debt

Los Angeles Tax Debt Attorneys

When an individual owes a significant tax debt, the situation can become extremely stressful and downright frightening. The IRS has many ways to recover their debt, from seizing your property to serving a tax levy on your bank account and wages. There are ways you can take action and protect your rights, even against the California state and federal government. We have helped many people reduce and even eliminate tax debts through personal bankruptcy.

How Can I Discharge Tax Debt Through Bankruptcy?

Chapter 7 and Chapter 13 bankruptcy can allow you to discharge income tax debt, as long as certain requirements are met. The “3/2/240 rule” applies to all income tax, whether it is federal, state or local. The 3/2/240 rule is as follows:

  • The taxes must have become due more than three years prior to the filing of the bankruptcy
  • The tax returns must have been filed at least two years prior to the bankruptcy filing
  • The taxes must have been assessed at least 240 days prior to the bankruptcy filing. An “assessment” refers to the acknowledgement by the IRS of the overdue tax.

If your tax returns are truthful and you have not been intentionally avoiding paying your taxes, you may be able to discharge your debt at the conclusion of a personal bankruptcy proceeding. Chapter 7, or “clean slate” bankruptcy, makes it possible to discharge the entire tax debt, while Chapter 13 bankruptcy organizes your tax debt into a three-to-five year plan that allows you to make affordable payments free of penalties or interest. Once our attorney has helped you discharge your tax debt, the government cannot take further action against you.

What Can I Do About Tax Debt That Is Not Dischargeable?

While Chapter 7 bankruptcy can eliminate a great deal of tax debt, there are some types which are not dischargeable. These include tax debts from unfiled returns, trust fund taxes, withholding tax taken by an employer and penalties from non-dischargeable tax debt. We can give you alternatives in these situations, such as a compromise or payment agreement with the IRS that will allow you to pay an amount lower than the tax debt owed.

An Experienced Attorney Can Help You Relieve Your Tax

Debt

If you have significant tax debts, you do not have to face the IRS or state government alone. Seeking the help of a Los Angeles bankruptcy attorney can be the first step towards relieving your tax burden as well as your stress.

Contact us for a free consultation.

  • Michael H. Raichelson Photo
    Michael H. Raichelson

    Business Litigation & Bankruptcy Attorney

    Michael H. Raichelson has over 25 years of business, real estate and bankruptcy litigation experience, helping businesses and individuals throughout the United States and Internationally. In addition, while acting as General Counsel for a national litigation firm for several years, he supervised the legal department while personally participating in hundreds of litigated matters. Mr. Raichelson was born in Washington D.C. and was raised and educated in California. He grew up in the Los Angeles ...
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