New Jersey IRS Tax Debt Lawyer
Bankruptcy attorney assists people who owe the federal and state government
Unpaid income tax obligations are among the debt problems that can lead someone to consider bankruptcy. Some back taxes are dischargeable through Chapter 7 bankruptcy and you might be able to use this process to reduce or eliminate the overall debt you owe to the IRS. With five offices in northern New Jersey, the Law Offices of James C. Zimmermann delivers effective advice to clients on bankruptcy and taxation issues. We can explain the complex rules that allow certain Chapter 7 filers to ease their tax burden. Once you understand your options and determine how to proceed, our firm will make every legal effort to eliminate as much debt as possible.
Firm uses bankruptcy and other methods to help clients tackle tax obligations
If you owe federal or state income taxes, your bankruptcy may be a feasible means of reducing what you owe. Only back income taxes can be discharged, not property taxes, payroll taxes or penalties that were imposed. In addition, these conditions must be satisfied:
- The tax liability must be at least three years old — Back taxes are exempted from bankruptcy discharge for at least three years. Only older debts are eligible for elimination. If a lien has been attached on your property by the IRS or the New Jersey Division of Taxation, bankruptcy will not clear that lien.
- You filed a tax return and did not intentionally mislead the tax authority — Bankruptcy is meant to relieve overwhelming debt. It is not a method of evading legal responsibilities. You can seek discharge through bankruptcy only if you filed an accurate tax return for the relevant year.
- The tax was not assessed at least 240 days before bankruptcy filing — You cannot immediately file for bankruptcy after getting an income tax bill and expect the debt to be discharged.
Attorney James C. Zimmerman will analyze the facts in your case and advise you if any tax debt can be discharged under Chapter 7 or addressed in a Chapter 13 repayment plan.
There are also other methods of lessening the burden when you owe money tax authorities, such as:
- Offer in compromise — Depending on your individual circumstances, you might be able to make an offer in compromise. That means your obligation would be satisfied for an amount that is less than what you owe, as long as the tax authority agrees.
- Installment plan — The IRS is often amenable to creating feasible installment plans for taxpayers who lack the ability to pay off their balance on time.
- Currently Not Collectible status — People who are dealing with serious financial hardship might choose to file Form 433 applying for “Currently Not Collectible” status. If granted, enforcement efforts and penalties are halted. However, penalties and interest can continue to accrue and you would remain liable to pay what you owe if your income increases.
- Statutory end date — Long-term tax debt could be relieved based on the statutory Collection Status End Date. This means that unless an extension is given, taxes cannot be collected 10 years after they are assessed.
Regardless of the size or age of your tax debt, our firm will walk you through each reasonable option so you can put your tax problems behind you.
Contact a New Jersey attorney for information on possibly reducing your tax debt
The Law Offices of James C. Zimmermann advises New Jersey clients on methods of reducing tax debt through bankruptcy. Our firm has offices in Vernon, Wayne, Pompton Lakes, Hackensack and Nutley. You can call 973-764-1633 or contact us online to make an appointment for a free initial consultation.