Chattanooga Tax Debt Lawyer

Tax Debt Attorney In Chattanooga, TN

If you are unable to file your taxes on time, you face penalties that you must pay to the Internal Revenue Service (IRS). If you do not pay, the penalties and interest may grow. There are numerous methods to address tax debt. If you cannot pay the amount, bankruptcy may help you address the debt. A Chattanooga tax debt lawyer is an essential ally, as they can review your financial situation and determine if bankruptcy can help you secure a new start.

The IRS is known to be a persistent creditor when you owe them back taxes, penalties, and interest.

In fiscal year 2023, the IRS collected over $104.1 billion in assessed and unpaid taxes. The agency took several enforcement actions, including 179,019 notices of liens and 65 seizures of property. When you feel like you have no other options, an experienced attorney can help. You may have several options, including potentially paying back or discharging the debt in bankruptcy. However, these circumstances are very limited.

Finding the Right Course of Action for Your Tax Debt Relief

At Mark T. Young & Associates, we understand how overwhelming it is to deal with debts you cannot repay. After reviewing your unique financial circumstances, we can use our resources and knowledge to assess your debt and what you can do about it. Mark T. Young, the firm’s leading attorney, has over 30 years of legal experience in bankruptcy petitions.

Our firm takes the time needed to evaluate the options you can take to address your debt and whether certain types of bankruptcy would be helpful to you.

Can Bankruptcy Defer Tax Debt?

Bankruptcy is an option that individuals can use to cancel certain debts and have a new beginning for their finances. While some people believe tax debt can never be discharged through bankruptcy, this is not always true. While many types of tax debt cannot be discharged, some debt can be reduced or cleared if certain criteria are met.

You could discharge your debt in specific types of bankruptcy, depending on the type of tax debt, when you filed the tax return, and how long the tax was overdue. An attorney can review your tax debt and what your options are for discharging it.

Generally, if you are filing for individual bankruptcy, you could discharge your tax debt if you meet the following criteria:

1. The debt is on income tax debt or gross receipts in the taxable year.
2. The income debt was for taxes due in a return within three years prior to filing the petition for bankruptcy. This date the return was due also includes any extensions.
3. The income tax owed was assessed by the IRS within 240 days prior to filing the bankruptcy petition. This does not include any time when a pending offer in compromise was being assessed or in effect.
4. The income tax was not fraudulent in any way. This includes intentionally evading tax laws.
5. Your tax returns have not been late, unfiled, or fraudulent for the past two years prior to the filing of the petition.

If you meet these requirements, your tax debt could be discharged. However, many other circumstances can affect whether you qualify. A dedicated attorney is crucial for understanding your options.

Chapter 7 Bankruptcy and Tax Debts

A Chapter 7 bankruptcy is commonly used by individuals to clear debts. Income tax debts could be addressed through this option, but not always. If you meet requirements under the Bankruptcy Code and your income tax debts are old enough, you may be able to get them discharged. It is important to discuss your situation with a qualified bankruptcy lawyer, as discharging income tax debt requires specialized analysis and evaluation.

If you qualify for a Chapter 7 bankruptcy for your income tax debt, the bankruptcy process involves eliminating some (possibly all) of that debt. This can be a complicated process and result in significant property loss. You should always discuss bankruptcy with a legal professional beforehand to determine if it is a beneficial option for you.