April 15th seems to be a day that some people dread.People are feverishly working to get their tax returns filed before the deadline, resorting to ask for an extensionand inevitably finding that that they owe the IRS money.For some the liability to the IRS is nominal and can be dealt with accordingly.However, for others the IRS becomes the annoying monkey on their back that they just can't shake.Therefore, in certain instances, people choose to procrastinate and avoid the burden of paying their tax liability until they find that the monkey is now a 300 pound gorilla. The IRS has a lot of power and people unfortunately find that the IRS can lien property, but also garnish their wages or seize any potential future tax refunds that they may be entitled to.However, there is a way to deal with IRS debt in a manner that is beneficial not only to the individual, but also to the IRS.People may be unaware that a Chapter 13 Bankruptcy affords protection from the IRS, at the same time, allows the individual a period up to 5 years to pay their IRS obligation back.The benefit is doing this is almost immediate.Once a Chapter 13 case is filed, if the IRS has a levy on property or wages, the Chapter 13 case stops levy that the date the case is filed.In addition, any money that is taken after the case is filed must be returned to the client, and any liens may be avoided. >> Find more information on Chapter 13 Bankruptcy http://www.bankruptcyhome.com/chapter13.htm However, in order to get the relief from the IRS that people may desperately need, the only condition is the Chapter 13 case must be completed to the extent the IRS debt must be cured.If this is not accomplished then any lien or garnishment that took place before the case was filed maybe enforced again. It is also important to understand IRS debt can be categorized in a manner that the debt maybe dischargeable through a Chapter 13 Bankruptcy case.IRS debt that is less than three (3) years old is considered a priority debt that must be repaid if in a Chapter 13 Bankruptcy case.However, IRS debt that is older than three (3) years is classified as an unsecured penalty that does not have to be paid back while in a Chapter 13 case if certain conditions are net.In order to get this benefit you must have filed your tax returns on time.In addition, if your income does not support a Chapter 13 plan (reorganization) payment to any of your unsecured creditors, then the IRS liability that is older than 3 years is treated as a credit card debt and is discharged (cleared) upon completion of the Chapter 13 Case. Another benefit of filing a Chapter 13 case is that if you have any liability to the IRS after filing the case the post-filing liability can be added into the monthly Chapter 13 payment.For example, if you filed your Chapter 13 Bankruptcy in 2007 and you know that you will owe to the IRS again when you file the 2007 tax return, the liability owed for that year can be spread out over the remaining time in your Bankruptcy case.Typically a Chapter 13 case lasts five (5) years, so the ability to deal with the IRS through the bankruptcy is usually more affordable than setting up an arrangement with the IRS directly to pay back the liability owed over a six (6) to twelve (12) month period of time. This benefit in dealing with the IRS after filing a bankruptcy case is not seen with other creditors.The rule is that any post-petition debt incurred by an individual after filing a bankruptcy case is non-dischargeable and cannot be added to a bankruptcy matter.This limitation is better illustrated when dealing with property tax authorities.Property taxes that are due and owing after a case is filed, cannot be included in a bankruptcy case to be paid unless there is an agreement with the property tax authority.This agreement, more often than not, is never reached because the property tax authorities would sacrifice their ability to charge interest on unpaid property taxes as well as their power to foreclose on their lien if they allowed future property taxes to be paid through the plan.Whereas, the IRS feels secured if they are treated in a Bankruptcy case, because they can almost be certain that they will be paid. >> Find more information on keeping your stuff http://www.bankruptcyhome.com/keepyourstuff.htm Therefore, if you ever find yourself in a position where you owe the IRS and the ability to pay them is not possible, before they lien or garnish any property, you may want to look into a Chapter 13 Bankruptcy.This will appease the annoying monkey so that he never becomes an overbearing gorilla.
Please Rate this Article 5 out of 54 out of 53 out of 52 out of 51 out of 5
Not yet Rated
