the irs sent me a letter stating that i owe them $30000 and they are going to garnish my wadges. what are my options?
Not all Federal Income Taxes are dischargable in bankruptcy. In order to determine if the taxes comprising this obligation are in fact dischargable you should immediately schedule an appointment with an experienced bankruptcy attorney in your area. Many bankruptcy attorneys offer a complimentary first consultation.
The foregoing answer is for informational and educational purposes, not for purposes of legal representation. This answer is based on New Jersey law and is necessarily general in nature.. Laws in other states may be different, and each situation is different, so this answer might not apply accurately to you. No attorney client relationship is to be implied from this answer. Always seek independent legal advice
While bankruptcy might stop the wage garnishment, you need to discuss the full details with a bankruptcy attorney to see if Chapter 7 or Chapter 13 is best for you. An attorney can review your situation to see if the taxes are dischargeable in Chapter 7 or can be paid with a court-order Chapter 13.
A tax attorney or CPA might also be able to get the wage garnishment reduced for you.
First, the firm is a debt relief agency according to the U.S. Bankruptcy Code. We help people file for bankruptcy. We also do other stuff and we do it well, but Congress wants me to post this notice. Second, nothing on this site is legal advice. You are not my client unless you enter into a written agreement signed by you and me.
You have lots of options. Bankruptcy may or may not be a viable option. At worst case, you may pay the IRS over 72 months. That would work out to about $420 per month. You simply call them and request a streamlined agreement. If you have gotten to the point of garnishment, it meant that you ignored many communications from the IRS or they do not have your correct address. If you cannot pay $420 per month, you may make financial disclosure to the IRS to secure a lower installment agreement or "currently not collectible" status. The key is to make contact with the IRS and either get into an agreement or provide financial disclosure. With that information they can stop the garnishment. Filing a bankruptcy may be an extreme response, but one that may be appropriate considering all facts and circumstances. Good luck.
This answer is provided for general information only. You should seek advice from an attorney or tax professional.
Unfortunately, most back taxes are non-dischargeable, meaning that a bankruptcy won't eliminate your debt at all. While there are some small exceptions to this, the vast majority of people owing back taxes will find no relief at all. In order to even have the taxes considered for discharge, the following criteria have to be met:
1. The tax liability must have been incurred at least three (3) years prior to the bankruptcy being filed;
2. You must have actually filed the return showing the liability at least two (2) years prior to the bankruptcy being filed;
3. The IRS must have entered an assessment against you more than 240 days prior to the bankruptcy being filed;
4. There must not be any allegations of tax evasion or fraud (very difficult since the IRS makes that determination on its own), and;
5. You must have filed your last four (4) tax returns prior to your 341 hearing.
Some tax liabilities are NEVER dischargeable. These include: payroll taxes, business, franchise or use taxes, and business sales taxes.
Certainly, consult with a bankruptcy attorney, but do so with the understanding that few personal income tax liabilities meet all these criteria.
Answers on Avvo are not to be considered a response to a specific legal issue in a specific jurisdiction - they are to be considered only general responses to hypothetical scenarios posed by the questioner. For specific legal advice, please consult with a licensed attorney in your jurisdiction. No information contained herein should be construed as a solicitation for business, an offer to perform legal services in any jurisdiction in which the attorneys of Corbin Law Office are not licensed, or the dissemination of legal advice. No creation of an attorney-client relationship should be assumed or implied. We are a debt relief agency. Corbin Law Office helps people file for bankruptcy relief under the bankruptcy code.
If the taxes are old enough and meet other criteria then they can be discharged in bankruptcy. You should contact an experienced Minnesota bankruptcy attorney to discuss if that would be an option for you.
Here is the info I would want to have to fully advise you 1) what tax years? 2) why taxes owed (audit, unreported income, self employment, retirement withdrawal, under withholding)? 3) what, if any other kinds of debts? 4) how much left in your budget after just paying necessary living expenses? You could pay tax debt through a chapter13, discharge tax debt in chapter 7 or make payment arrangements with the IRS. The devil is in the details. Hope this perspective helps!
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