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I owe back taxes of about 50,000. I want to know whats the best way to reduce payment.

New York, NY |

owed since about 2002 made some payments through past refunds but now I'm not working and only getting 800.00 in child support.

Attorney Answers 3

  1. Best answer

    There are four principal ways to pay off/reduce taxes:
    1) Installment payment agreement with IRS
    2) Offer in Compromise with IRS
    3) Discharge of Taxes in Chapter 7 bankruptcy
    4) Pay off Taxes in Chapter 13 bankruptcy

    Each one of these strategies has advantages and disadvantages and each has qualification criteria that you may or may not fulfill. The best thing would be to contact an attorney who can assess each of these strategies and determine which is best for you. Keep in mind that if you go to an accountant or tax attorney who does have any expertise in bankruptcy, you won't get that perspective. Likewise if you go to a bankruptcy attorney they won't be able to tell you what your options are with the IRS.

    Good luck,

    No attorney client relationship has been created by this answer.

  2. Assuming that you filed the return in 2002 and that the government did not file it on your behalf first and assuming that the taxes are for income earned as opposed to sales taxes, you would qualify to discharge the tax debt in a bankruptcy case.

  3. You may be able to discharge those old taxes altogether in a bankruptcy. I suggest you consult with an experienced bankruptcy attorney for all the details, but in a nutshell, if the taxes are income taxes and are more than three years overdue at the time you file bankruptcy, AND you filed your tax return on time AND there is no fraud or willful evasion involved AND the income tax debt was assessed by the IRS at least 240 days before you filed your bankruptcy petition, or was not assessed yet, then YES you should be able to discharge these taxes in bankruptcy. Good luck.

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