Cash Tracks Financial Tax Resolution: tax debt

Monday, October 21, 2024

Colorado Springs: What to Do When You Do Not Think You Owe What the IRS Says You

Receiving a notice from the IRS is a frightening experience! When you believe you do not owe any money, it is causes a high level of stress. Under such circumstance it's best to approach the situation with a calm mindset as you try to understand why you received the notice. Here are some recommended steps to take:

DO NOT IGNORE THE NOTICE!
Contact your tax professional to help you understand the notice.
A tax professional will explain why you received the notice
You will need to verify the information such as reported income and any errors in calculations.
Draft an appropriate response

While receiving an IRS notice can be scary, approaching it with a clear plan and professional assistance can help resolve the issue efficiently. It is best to keep in mind that the IRS is open to communication, and many issues can be resolved through proper channels.

Cash Tracks Financial of Colorado Springs

Marcelino Dodge, EA, CTRC

525 N Cascade Ave., Suite 200

Colorado Springs, CO 80903

(719) 359-8789

www.cashtracksfinancial.com

success@cashtracksfinancial.com

Monday, August 5, 2024

Colorado Springs: Can Bankruptcy Solve My Tax Problems?

Having a large tax debt can make you feel both frightened and overwhelmed that your bank account will be drained by the IRS. Then, someone suggests that if you file bankruptcy that will eliminate the tax debt. It this true? Will filing a chapter 7 bankruptcy eliminate your tax debt?

Certain IRS debts may be dischargeable in bankruptcy. To qualify for discharge under Chapter 7 or Chapter 11, the tax debt must meet specific criteria:

Age of Debt: The tax debt must be at least three years old.
Filing Date: You must have filed a tax return for the debt at least two years before filing for bankruptcy.
Assessment Date: The IRS must have assessed the tax debt at least 240 days before you file for bankruptcy.
No Fraud or Evasion: The tax return must not be fraudulent, and you must not be guilty of tax evasion.

If these conditions are met, the tax debt may be discharged, meaning you are no longer legally required to pay it. However, any cancellation of debt (COD) income resulting from the discharge is reportable on the bankruptcy estate's tax return, not your individual return.

It's also important to note that while bankruptcy can provide relief, it doesn't eliminate all tax-related obligations. Consulting with a bankruptcy attorney or tax professional can help you navigate the complexities and determine the best course of action for your specific situation.