I recently attended a Continuing Legal Education (CLE) on Offers and Compromises. An Offer and Compromise is a technique that Lawyers and Accountants use to settle past due income taxes with the IRS and Maryland Comptroller of the Currency. What amazed me is that the attorneys teaching the CLE have the same perspective that many of my clients have that bankruptcy is not an option to discharge taxes. While taxes are not automatically dischargeable in Chapter 7, usually if sufficient time passes and the taxes are not the result of evassion and/or fraud, income taxes can be discharged in Chapter 7 Bankruptcy.

If you owe past due income taxes, you need to consult with a lawyer that is experienced in evaluating your tax issues. Generally speaking, an experienced attorney will obtain the client's tax transcripts from the IRS, and after the review of the tax transcript, conduct an analysis of when your taxes will be dischargeable in bankruptcy.

If you are facing levies or wage garnishments from the IRS or Comptroller of Maryland, contact our office to discuss your options in Chapter 7 as well as Offers and Compromises.