In Chapter 7 BK, can I ask IRS to put me in noncollectable?

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1. Licensed in CA

   

   Matthew StaubPro

   San Diego Tax Lawyer

   Contributor Level 12

   

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   Answered May 14, 2012 16:53. I am going to partially disagree. Your payroll taxes are not going to be dischargeable in bankruptcy. Putting your tax debt in non-collectible status is only a temporary solution, as the IRS will still pursue the debt owed until the balance is paid off in full.

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2. 

   Massimo Paternoster

   New York Business Attorney

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   Answered May 14, 2012 15:16. 1. Taxes are generally non dischargeable in chapter 7. Payroll taxes can be discharged if certain conditions are met. You need legal assistance to check this out.
   2. 'Non collectable' status does not mean that IRS will forget about you. Your debt will not be discharged. IRS will monitor your situation; if at a later time there is any chance to collect your debt, they will collect it.

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   James WebsterPro

   Mesa Bankruptcy Attorney

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   Answered May 14, 2012 16:47. I have no idea what the other attorney is talking about.
   
   When it comes to 940 and 941 taxes, or in other words "trust taxes," you are on the hook for as long as they want to chase. They cannot be discharge because in essence you held this money on behalf of the government and you took it from them.
   
   They make the rules not me.
   
   Not all laws taxes work this way, but his kind of tax does.
   
   You need a tax and bankruptcy attorney.
   
   Your chapter 7 was nothing more than a speed bump in your relationship with the IRS.
   
   It is not clear to me that you should not go back into a Chapter 13 and try to whittle down the debt through a plan.
   
   Get an attorney. If you have one, get another one.
   
   Good luck.

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4. Licensed in CA

   

   Curtis Harrington

   Long Beach Bankruptcy Attorney

   Contributor Level 20

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   Answered May 15, 2012 03:39. Make sure that the payroll is 100% trust fund and not 50-50 trust fund and employer part.
   
   You WERE the employer, right?
   
   
   I dig what you say about using the bankruptcy to demonstrate non-collectable status. Discharge (in this regard) is a blessing by the court to bolster your "judgement proof" status.
   
   Depending upon your age, future prospects, health, etc. an offer in compromise might be possible, but I'm not assured that you were an employer, nor whether 100% of the payroll were actual trust taxes. Corporation? Sole Proprietor?
   
   A lot of questions there.

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