Memphis attorney Vincent Perryman discusses tax, debt and bankruptcy with Bruce Ralston

Memphis attorney Vince Perryman discusses tax, debt and bankruptcy with Bruce Ralston. Bruce is an attorney with MemphisBankruptcyLawyer.com. A big topic in the mid south is bankruptcy, but there misconceived notions that revolve around what a person can or can’t do with tax debt. Two primary reasons that people file for bankruptcy are for the automatic stay and discharge. Automatic stay is an injunction at the beginning of a case that stops anything from happening such as the IRS foreclosing on your home or garnishments. Discharge is a permanent injunction imposed at the end of most cases which says to creditors not to bother an individual about a specific debt. There are also three categories of debt which include: secured debts, general unsecured debts and unsecured priority. Knowing the specifics about each category can help in determining whether or not someone should file for bankruptcy.

Memphis attorney Vince Perryman discusses tax, debt and bankruptcy with Bruce Ralston. A good outline was given on how bankruptcy works and that there are three different debt categories which are secured debt, general unsecured debt and unsecured priority which taxes can fall into. In order to discharge a tax debt it a goal is to make the debt a general unsecured debt. The debt itself has to be a personal income tax debt as only individuals can discharge debts. The tax return itself must have been filed at least two years prior to the filing of the bankruptcy petition and has to be filed by the tax payer. The IRS does SFR’s if and when you don’t file your own tax returns the IRS will eventually do it for you. This however does not count as the filing of a tax return. Assessment doesn’t become an issue very often and once you file a return the IRS will assess the return within a few weeks. A new audit is a possibility based on various scenarios such as someone cashing out a retirement account or another 1099 was somehow omitted from their tax return.

Memphis attorney Vince Perryman discusses tax, debt and bankruptcy with Bruce Ralston. It was previously discussed as to what makes a tax debt dischargeable but there are exceptions to that. One exception is fraud which is high standard and is the burden of the IRS to prove a person has committed fraud. Willful evasion is a much lower standard and the burden falls on the tax payer to prove that they did not willfully evade a tax. Failure to file a tax return doesn’t count as criteria for willful evasion. A tax lien is a lien imposed by law upon real or personal property for the purpose of securing the payment of taxes. Tax liens are imposed differently from state to state and in Tennessee liens are registered by county.