phillipfostercpa
|
Whoah!
I have bad news, and I have good news! So, hold on for this ride, and I will give you the bad news, first.
The bad news, as I understand it...
Federal Income Tax Debt, if it has been less than three years after it was assessed, will not be discharged by bankruptcy.
Now, the good news, as I understand it...
1) Federal Income Tax Debt, if it has been more than three years after it was assessed, may be discharged by bankruptcy.
2) When a taxpayer just cannot pay his income taxes, because of financial hardship, etc, as evidenced by "Collection Information Statement" (Form 433-F), the IRS may put the taxpayer on "Uncollectable Status," which stalls IRS collection efforts, for a time. However, penalties and interest continue to accrue.
3) When Federal Income Tax debt ages over ten years after date of assessment, the tax debt falls off of the IRS computer. The IRS collection efforts, however, may become more aggressive as the ten year mark approaches!
4) When all income tax returns are filed up to date, the taxpayer may attempt to get relief under the Offer in Compromise program and settle for dimes on the dollar of his total tax debt.
5) As I understood the facts in your question, though, you have not yet filed for bankruptcy, anyway. I suggest, by all means, that you gather up your business expenses, report your accurate revenue, deduct itemized deductions, claim costs of capital gain assets sold, etc, on the late return you actually file. The return you file should override any substitute return filed by the IRS!
You may refer to my webpage for a case similar to the one you proposed, here. Go to http://www.phillipfostercpa.com/tax.html and, by all means, use the Free Initial Consultation Form, if you believe I can help you further!
Phil |
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