How Does Chapter 13 Bankruptcy Affect an IRS Wage Garnishment, Tax Lien, & Tax Debts

If you are drowning in federal tax problems, you may be considering Chapter Thirteen bankruptcy and our focus here is going to be on how a Chapter Thirteen bankruptcy will affect IRS wage garnishments, federal tax liens, and federal income taxes that you owe. Tax Withholding Estimator https://www.irs.gov/individuals/tax-w... Where's My Refund https://www.irs.gov/wheres-my-refund Have a professional prepare your taxes remotely or file online yourself: https://bit.ly/Liberty-Tax-Online Get your tax refund faster: https://bit.ly/e-file-taxes Get a tax refund loan/cash advance on your tax refund: https://bit.ly/ez-cash-advance File and print your taxes for free: https://bit.ly/FreeTaxCom Ugh 🤦🏾‍♀️ - the CPA in me is always looking at the money! So, if you buy something through a link, I might get a commission. ----------------------------------------------------------------------------- As a former IRS Agent, I try to explain federal taxes to defend against an audit. While there are no guarantees, it’s good to have an insiders view. ❣️ Need more information? Contact us. https://taxaxecpa.com/contact #chapter13bankruptcy 00:00 - Chapter 13 bankruptcy 00:30 - Wage garnishments, collection actions, and tax court 01:48 - Tax lien 05:09 - How does Chapter 13 bankruptcy work with taxes 06:07 - What taxes can be discharged 08:02 - What happens after you file for bankruptcy 08:39 - What happens to taxes that can't be discharged 09:20 - Can you get tax refunds 09:54 - Hardship discharge TRANSCRIPT: You probably already know that the IRS can seize or place liens on your assets, take your future tax refunds, and garnish your wages. When you file a petition for Chapter Thirteen bankruptcy, a wage garnishment, tax levy, and any type of collection or enforcement actions are stopped. Even tax court proceedings will be stopped for any tax debt that you owe for tax periods that ended before the bankruptcy petition. If you are currently in tax court, the bankruptcy court can decide whether the bankruptcy court or the tax court will handle the tax case. So, if it decides to do so, the bankruptcy court can push your tax issue back over to the tax court. When it comes to a lien, if the IRS does not file a Notice of Federal Tax Lien before you file for bankruptcy, they cannot file one during your Chapter Thirteen bankruptcy case. If the IRS files a Notice of Federal Tax Lien before you file for Chapter Thirteen bankruptcy, the IRS will have a secured claim that will remain attached to all of your assets and you will have to pay the claim through your bankruptcy payment plan. Only individuals and sole proprietors can file a Chapter Thirteen. Basically, Chapter Thirteen gives you time to repay some or all of your debt. There is a debt limit though in the amount of $2,750,000 for your secured and unsecured debts combined. This limit is temporary and it doesn't matter if the debt is secured or unsecured. This limit is set to revert back to lower limits in July of 2024. The lower limits would revert back to $1,395,875 for secured debts and $465,275 for unsecured debts. The limits are adjusted every three years, so you should always check for the latest limits. Once you file for bankruptcy, the IRS will file a claim with the bankruptcy court, just like any other creditor. The IRS can file a claim even if taxes have not been assessed. Only taxes on income or gross receipts can be discharged. To be discharged, the income or gross receipts have to be for tax returns due more than three years before your bankruptcy petition date. The three years is from the date the return is due and not from the date when you filed the return. You had to have filed these tax returns two or more years before you file for bankruptcy. Your federal tax debt will not be discharged for any year that you did not file a tax return. If the IRS prepared a substitute return and you did not assist the IRS in preparing the return and you did not sign the return, the substitute return will count as an unfiled return. If any part of your tax return is considered to be fraudulent or you tried to evade or defeat your tax debt, you won't be able to discharge any tax debt associated with that tax return. If the IRS assessed the tax debt within 240 days before you filed for bankruptcy, that tax debt cannot be discharged. For Chapter Thirteen, you have to file all of your federal tax returns that were due within the four years before you filed for bankruptcy. ABOUT US: Welcome to Tax Axe! It’s time to learn some federal income tax strategies. It's true taxes can be complicated, so we’re here to help you navigate it. On our channel, we believe you shouldn’t have to pay more tax simply because you don’t have enough knowledge on the subject. Ready to learn? 👉 𝐈𝐟 𝐲𝐨𝐮 𝐥𝐢𝐤𝐞 𝐭𝐡𝐢𝐬 𝐯𝐢𝐝𝐞𝐨, 𝐩𝐥𝐞𝐚𝐬𝐞 𝐥𝐢𝐤𝐞 𝐢𝐭 𝐚𝐧𝐝 𝐬𝐡𝐚𝐫𝐞 𝐢𝐭. 👉 𝐃𝐨𝐧'𝐭 𝐟𝐨𝐫𝐠𝐞𝐭 𝐭𝐨 𝐬𝐮𝐛𝐬𝐜𝐫𝐢𝐛𝐞 𝐟𝐨𝐫 𝐦𝐨𝐫𝐞 𝐮𝐩𝐝𝐚𝐭𝐞𝐬    / @tax-axe   MEDIA COURTESY OF: