Tax Problems

Learn Whether You Can Discharge Tax Debt in Bankruptcy

At The Fried Law Firm in Bethesda, we advise and represent individuals and couples who find themselves in trouble with the IRS or state and local tax authorities in Maryland, Northern Virginia and the District of Columbia. Contact one of our lawyers for sound advice and comprehensive client service on your tax problem.

Our goal is to resolve your tax problem as completely as possible

Different professionals are likely to see tax problems through their own lenses. Bankruptcy lawyers might recommend a Chapter 7 or Chapter 13 petition and take it from there. A tax accountant might prefer an offer in compromise or installment plan.

We prefer to take a broader look at your tax problems to make sure that you're getting the right advice for your specific situation. Our law firm integrates strengths in bankruptcy, tax litigation and troubled loan workouts to offer a wide range of solutions in any given situation. Because we can choose from any of eight or ten approaches to a given tax problem, our clients stand to benefit from the solution that addresses their needs quickly, completely and with a minimum of litigation.

Assuming that you have not foreclosed any options by letting deadlines pass, our attorneys can advise you about any of the following options:

• Administrative resolution with the IRS field office, including arrangements to avoid problems resulting from unfiled tax returns
• U.S. Tax Court action to dispute a notice of deficiency from the IRS or to show a denial of collection due process
• Resolution of matters involving innocent spouse relief, responsible person liability, classification as an employee or independent contractor, or allegations of transferee liability
• Bankruptcy under Chapter 7, Chapter 11 or Chapter 13 to stay collection proceedings, expand your options for a negotiated resolution, or even obtain a discharge of the tax obligations
• In larger cases, paying the disputed tax and suing for a refund in U.S. District Court

Many tax obligations can be discharged in bankruptcy

The Bankruptcy Code characterizes most taxes as nondischargeable claims with priority. In other words, the obligation to pay the tax will not only survive bankruptcy, but the taxes will need to be paid ahead of most other unsecured creditors.

Individuals can discharge older tax debts, however, under the following circumstances: First, the tax return was due at least three years and actually filed at least two years before bankruptcy; second, the tax was assessed more than 240 days before bankruptcy; and third, there was no taxpayer fraud or fraudulent tax return filing.

Sometimes it can be difficult to calculate the different time periods that affect the dischargeability of a tax debt, and certain events (such as a previous bankruptcy filing) can extend them. Our experience with complex tax problems both in and out of bankruptcy can give you an important advantage toward understanding and resolving your situation.

For additional information about our experience with consumer tax obligations of all kinds, including unfiled tax return problems, contact a knowledgeable attorney at The Fried Law Firm in Bethesda.