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310.376.9865
Saturday, May 21, 2011, I went to a 3 hour continuing education class presented by the local bankruptcy attorney debtor’s bar, CDCBAA, i.e., “Bankruptcy and Tax Crossover.” The presenters were two very sharp attorneys from the U.S. Internal Revenue office.
The two most important things I came away from this meeting with:
- Always filed your taxes on time, because if you don’t, it may make dealing with the back tax problem more difficult in the future.
- Always communicate with the IRS, if you don’t, they will shift into litigation and/or collection mode, and it will me much more difficult to resolve the problem.
Other interesting items of note:
- If you owe back taxes and are filing a Chapter 13, your bankruptcy attorney will be able to contact the local IRS insolvency unit rather that the Centralized Insolvency Unit somewhere back east.
- You always want to communicate with IRS, because if you do not, it may wind up where the IRS files a Notice of Federal Tax Lien. This lien is one of the broadest and most difficult for a bankruptcy attorney to deal with, because it is so broad. This lien, NFTL, attaches to everything you own at time of filing, and is good for ten years. So, if you have ignored IRS, and they finally filed a NTFL, it attaches to your clothes, car, retirement plan, everything.
- Now if you only have minimal assets, your bankruptcy attorney may be able to request IRS to dismiss the lien.
- However, if you have assets, this lien will ride through the bankruptcy, and IRS will be able to collect any property that the lien has attached to pre filing. The biggest problem occurs when the debtor has a retirement plan. The debtor may not be able to receive his pension for years to come, but the presenters indicated they are able to file a “Right to Receive Levy” which as long as they continue to file, will be able to collect many years out. Moral of the story, communicate, do not let a NFTL be filed, it NFTL does get filed, and you have a retirement plan, make sure you deal with it before you retire.
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- Los Angeles/Orange County Bankruptcy Attorney
- Law Offices MJ Mann Bankruptcy Attorney
- 2706 Artesia Blvd, Suite BK
- Redondo Beach, CA 90278
- 310.376.9865
