Educational Tax Tip: Can Bankruptcy Eliminate Tax Debt?
While most tax debts cannot be wiped out in bankruptcy, there are rare situations where certain income tax debts may qualify. To be discharged, the taxes must meet strict requirements—such as being tied to returns filed on time, being at least three years old, and having no fraud or evasion involved. Even then, payroll taxes and certain penalties remain non-dischargeable. If you’re considering bankruptcy as a way to manage overwhelming tax debt, it’s important to know whether your case qualifies before
Educational Tax Tip: When the IRS Refers Your Case to a Revenue Officer
Has your tax case been assigned to an IRS Revenue Officer? This means your situation is considered more serious, and the IRS is taking a closer, more aggressive approach to collect the debt. Revenue Officers have the authority to investigate your finances, request documents, and even initiate levies or liens if you don’t cooperate. Staying proactive, responding promptly, and working toward a resolution is critical to avoid enforced actions. Need help dealing with a Revenue Officer and protecting your
Educational Tax Tip: Can the IRS Levy a Joint Bank Account?
Sharing a bank account with a spouse, family member, or roommate? Even if the tax debt is only yours, the IRS can potentially levy funds from a joint account to satisfy your liability. Federal rules generally allow the IRS to take your portion of the account, but the co-owner’s funds may be protected if they can prove their ownership. Acting quickly can help protect both your finances and your co-owner’s. Need guidance on protecting joint accounts or exploring tax relief options? Visit our website and
Educational Tax Tip: What Happens If the IRS Rejects Your CNC Request
Did the IRS deny your request for Currently Not Collectible (CNC) status? This usually means they believe you can afford to make payments based on your reported income, expenses, or assets. If your situation changes or you believe your financial hardship was not properly reflected, you can reapply with updated documentation or explore other resolution options like an installment agreement or Offer in Compromise. Acting quickly is key to avoiding enforced collection actions. Need help reapplying or
Educational Tax Tip: How to Handle IRS Notices About Missing Forms
Did you receive an IRS notice about a missing Form 1099 or W-2? These letters are typically sent when the income reported to the IRS doesn’t match what you included on your tax return. Don’t panic—start by reviewing the notice and comparing it to your records. If you accidentally left out a form, you may need to file an amended return. If you believe the IRS is wrong, gather your supporting documentation and respond by the deadline provided. Ignoring the notice can lead to adjustments, penalties, and
Educational Tax Tip: How to Protect Yourself During a Field Audit
Have you ever wondered what to do if the IRS shows for a field audit? Don’t panic—the IRS never arrives unannounced. Field audits are scheduled only after several letters and notices are sent. To protect yourself during these in-depth examinations, keep your records organized, respond to questions truthfully but briefly, and avoid volunteering extra details. It’s strongly recommended to work with a tax professional throughout the process to ensure you're prepared and your rights are protected. If you’ve
Educational Tax Tip: How the IRS Calculates Penalties
Do you know how quickly penalties and interest can add up on unpaid taxes? The IRS can charge two separate penalties: one for filing late and another for paying late. The failure-to-file penalty is typically 5% of the unpaid taxes per month (up to 25%), while the failure-to-pay penalty is 0.5% per month (also up to 25%). On top of those, daily interest accrues on the total balance due. These charges can build up fast, turning a manageable debt into a much larger burden. Want help avoiding or resolving
