Since the COVID-19 pandemic, the Internal Revenue Service (IRS) has had a long backlog that, due in part to funding received in the Inflation Reduction Act of 2022, it only began to catch up on in mid-2023. In the meantime, the IRS’s backlogs and delays might have lulled taxpayers into a false sense of security. [...]
In June 2016, William Canada, Jr. took the Internal Revenue Service (IRS) to bankruptcy court and won. Mr. Canada successfully challenged the IRS’s claim for a $40 million penalty, pursuant to IRC §6707, for failing to report tax shelter transactions under IRC §6111. Per IRC §6707, the IRS imposes a penalty on anyone who fails [...]
If you want the chance to discharge your individual income taxes in bankruptcy, in Minnesota, file your returns. This is still an option if you live in the Eighth Circuit (this includes Minnesota). It is not an option in some other circuits. More courts are accepting or at least entertaining the principal that a late [...]
We often receive telephone calls and e-mails from individuals and businesses who have been contacted by the IRS for a tax obligation owing and they don’t know what to do. There are many options for dealing with these obligations. The correct option depends on the facts of the case. Unfortunately, too often, an individual or [...]
Yes, under the right circumstances. Income taxes (not trust-fund or withholding taxes) are dischargeable in a Chapter 7 Bankruptcy if certain conditions are met. Has it been more than three years since the original due date, including extensions, for the return? If not, the taxes are not dischargeable. (Three Year Rule). If the tax return [...]