Posted by Sidney Diamond on Tue, Mar 17, 2009 @ 09:22 AM
Dealing with the Internal Revenue Service is a scary proposition, especially if you owe them money. The Bankruptcy Court is one of the tools a taxpayer has at his/her disposal in dealing with "the tax man" in a variety of situations.
The Bankruptcy Court can be used to:
-Stop wage garnishments, bank account garnishments, levies, seizures of property and remove income tax liens that are in excess of the value of the property claimed as exempt;
-Income tax and certain other types of taxes become dischargeable after a period of time ranging from two to three years after the date tax returns were filed provided certain other conditions have been met;
-Taxes can be paid in monthly installments over a period of five years, usually without interest or additional penalties accruing in a Chapter 13 case;
-Disputes over how much is owed can be determined quickly and inexpensively by a Bankruptcy Judge;
-Tax liability can be determined by a Bankruptcy Judge in a setting which the Internal Revenue Service is subject to a level playing field.
This is a general outline of the options a taxpayer has in the Bankruptcy Court. As with anything dealing with taxes and the law can have numerous complications and exceptions.