Arizona

Tax Debt and Bankruptcy Blog

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By Michael S. Anderson of Anderson Tax Law logo for Arizona tax attorney Michael S. Anderson P.C.
  • Debt forgiven by creditor? Three options exist to avoid the tax

    Debt Forgiveness? When a creditor cancels or “forgives” a debt, it is deciding not to collect that debt.  It does this for various reasons, none of which are for the purpose of helping you. When the debt is forgiven following a settlement negotiation, a short sale, or a foreclosure, the creditor must report the amount…

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  • Late Filed Tax Returns and Bankruptcy – McCoy V. Mississippi

    Late Filed Tax Returns and Bankruptcy About a week ago on January 4, the 5th Circuit Court of appeals in the case “McCoy v. Mississippi State Tax Commission”  ruled that a debtor wasn’t entitled to a discharge of state taxes where the tax return was filed late even though it was filed by the taxpayer….

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  • Late Tax Returns and IRS Debt? Yes…the IRS can do bad things as a result

    Late Tax Returns and IRS Debt? Everyone who has either missed the filing of tax returns or owes the IRS significant tax debt wonders, at least once or twice, what it is the IRS can actually do to them…? Unfortunately, it can do a number of things…mostly bad.  Well…all bad really. I am providing this…

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  • Late Tax Return? Should I file it if it if I can’t afford to pay the balance?

    Late Tax Return?  Should I file it if it if I can’t afford to pay the balance? Choosing to leave a tax return unfiled because you can’t afford to pay the debt associated with it, is a mistake.  For some, just a small one.  For others…a big one. There are a few important reasons why…

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  • Filed an IRS extension request before filing your tax return? This may negatively impact the discharge in bankruptcy

    Filed an IRS Extension Request before filing your tax return.  Take this into account when deciding whether to use bankruptcy to discharge the debt Several rules exist that govern whether an  income tax debt is dischargeable in a bankruptcy case.  They are all important, but the first one typically mentioned is often given the least…

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  • IRS Substitute Returns: Overstated tax debt that can be solved

    The IRS substitute tax return is based on the reported gross income…only.  It doesn’t take into account: mortgage interest children (dependency exemptions) business expenses basis amounts – sale of property and stock charitable contributions marriage situation depreciation In essence, it doesn’t take anything into account that would reduce the tax on the gross reported income….

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  • Tax Debt – Why can’t I pay the original balance and receive a waiver of the penalty and interest?

    Tax Debt versus penalty and interest A common  question my clients ask is “why won’t the IRS just accept a check for the original tax amount and waive all the penalty and interest”. This question makes alot of sense and in the real world most creditors will consider making a deal that pays the original…

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  • IRS “Audit” awaits those who don’t file tax returns

    IRS Audit and Tax Returns If you haven’t filed a tax return in a while, don’t be surprised if you are “audited”. The IRS tracks you, and if returns are missing it will eventually request them. If the requested return(s) isn’t filed, the IRS has the authority to file/audit the tax return all in your…

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