There are three primary ways in which the issue of taxes comes up when we counsel clients about debt-relief options:
- If you have unpaid taxes, we can discuss whether you might be able to eliminate the tax debt in bankruptcy.
- If you are unable to discharge unpaid taxes in bankruptcy, we may be able to negotiate an offer in compromise with the IRS, whereby you pay only a portion of the total tax debt you owe.
- If you are considering a short sale or other type of debt settlement agreement, it is critically important for you to understand the tax consequences of such an action before you decide what to do.
At the law offices of Nathan Erlich, P.C., in Queens, we have an extensive background in bankruptcy, taxation, finance and real estate that helps us counsel our clients on the various tax issues that arise when we work with people on debt relief and bankruptcy filings.
Attorney Nathan Erlich, who has more than 20 years of legal experience, has a master's degree in taxation from Boston University and degrees in law, economics and finance from Australia's Monash University and the University of London. This extensive background in taxation allows our firm to provide legal advice that takes into consideration all important factors.
Eliminating Your Tax Debts in Bankruptcy
Under certain circumstances, you can eliminate federal or state income tax debt through consumer bankruptcy. If you have filed all your tax returns on time, you may be able to wipe out tax debt that is older than three years.
We Can Negotiate Offers in Compromise
If you are unable to discharge tax debt in bankruptcy, our law firm may be able to negotiate an offer in compromise on your behalf. With an offer in compromise, the IRS or other taxation authority accepts partial payment in full satisfaction of the debt. The IRS may also agree to lessen or eliminate penalties and interest on the debt.
Helping You Consider the Tax Implications of Your Decisions
Short sales are often promoted as clever ways to avoid foreclosure and bankruptcy. In a short sale, you sell your property for less than you owe and the bank takes the entire sale price as full satisfaction of the debt. For example, you owe $600,000 and sell your property for $300,000. The bank takes the $300,000 and calls it even. The problem is, the bank doesn't really call it even. At the end of the year, you will receive an IRS Form 1099 for $300,000 (the amount of debt the bank forgave) and you will may to report that $300,000 as income.
At the law offices of Nathan Erlich, P.C., we will help you carefully consider the tax implications of all your options before you decide how to proceed.
Contact Our Queens Tax and Bankruptcy Lawyers
We offer free initial consultations and have several offices to better serve clients throughout Queens and Brooklyn. We also are available nights and weekends. To schedule a private consultation, send us an e-mail or call toll free 877-518-7581.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.