If you believe that you owe back taxes to the IRS, then it is important that you speak with an experienced accountant prior to filing for bankruptcy. This can be extremely beneficial because the IRS could threaten a wage garnishment against you if you have not filed your taxes.

The dangers of letting the IRS call the shots on unfiled returns

All the tax debt assessed by the IRS in this situation are based on their calculations, not your own. When you file for bankruptcy, you will need to talk about your income over the past two years. This means that you need to have access to this information and tax returns are usually the fastest place where you can locate this. You are also required to list all of your property which also includes any tax refunds that you could have received.

What if I haven’t filed?

If you haven’t yet filed your returns and don’t know whether the government owes you money, and you don’t list the possible refund you could lose the right to claim it once your bankruptcy case is over. The problem of unfiled taxes could be extremely problematic if you intend to file for Chapter 13. Under the bankruptcy code, you are required to have tax returns filed properly for all the taxable periods for the four years prior to the date of your filing, and you have up to the date of your meeting with your creditors to accomplish this.

You may also have problems if you are filing for Chapter 7 bankruptcy. This is why it’s a good idea to get your tax returns in order before you consult with a bankruptcy attorney. Having necessary materials taken care of in advance could be very helpful.

If you are considering filing bankruptcy, then you should talk with a qualified attorney who can represent you. Jayson Lutzky has over 32 years of legal experience and represents people in individual and joint bankruptcies. He offers free in-office initial consultations at his Bronx, NY office. Call 718-514-6619 to set up an appointment. Saturday appointments are available. Visit www.MyNewYorkCityLawyer.com to learn more about bankruptcy.