One of my neighbor's father in law has not paid taxes in 15 years. Although he does own his house, he is otherwise flat broke and can't get any loans because he maxed out his credit cards a few years ago and never paid them. He is afraid to get a job that is on the books for fear that the IRS will realize he owes them money. Can he declare bankruptcy and come clean with the IRS without losing his house?
2007-02-05 00:42:50 · 4 answers · asked by Westport 2 in Business & Finance ➔ Credit
Federal income taxes very well may be dischargeable in bankrupcy; however, there are some time limitations if tax returns were required to be filed and they were not filed. Even then, bankruptcy may or may not be the best option.
There are many other options that are probably available. For example, as long as he has no assets and no income an Offer in Compromise might be a viable solution. Also, if the IRS filed returns for your father in law (called substitutes for return), you may find that your father can go back and file returns (and get tax refunds for the most recent tax years) and/or the statute of limitations on collections has expired. You can find out more about these options on my website, http://www.irstaxtrouble.com.
There are a number of tax attorneys whose practice focuses on these types of issues.
Kreig Mitchell
www.irstaxtrouble.com
www.irstaxtrouble.com/blog.htm
2007-02-10 06:03:36 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Well there is good news and bad news. The good news is that he can file for bankruptcy to relieve him of his current bad credit card debt. The bad news is that neither chapter 7 nor 13 filings will cover any goverment debts. When you owe for taxes, whether state or federal and you have not paid them, the first thing they do is put a lien on you.
As a practical matter, a lien does three things: First, it prevents the owner of the property from selling or otherwise transferring the property unless the lien is paid or otherwise addressed; second, if the lien is not paid voluntarily, the lien enables the person claiming the lien to undertake foreclosure of the lien and sell the property to pay the lien claimant's debt; and third, the lien established priorities among competing creditors who claim an interest in the property against which the lien has been claimed.
So I would advise him to get on the ball about this whole situation because each month, even though it is small, there is a penalty assesed for any taxes unpaid. And the longer he waits, the better chance he will run into the government coming and taking his personal possessions and selling them to satisfy his tax evasion not to mention if the amount is felony level he can also face imprisonment.
2007-02-06 00:50:32 · answer #2 · answered by TJ P 1 · 0⤊ 0⤋
He can declare bankruptcy, but he cannot put the irs in it. They will put him on a payment plan to pay it. He needs to get a job. so he can start paying, and then he won't loose his house. good luck.
2007-02-05 08:52:17 · answer #3 · answered by misty blue 6 · 0⤊ 0⤋
he needs to talk to a good credit lawyer and a reputable one.
f he dosnt do something he will lose everything.
He got to be smart.
2007-02-07 13:34:12 · answer #4 · answered by tennessee 7 · 0⤊ 0⤋