Articles Tagged with IRS

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Bankruptcy Lawyer Bryan W. Stone answers the question: “Can I keep my car if I file bankruptcy?”

Though no one enjoys the process of filing tax returns, the good news for many is that tax time usually involves a tax refund, providing a nice chunk of change that can be used for other things. For some, this means taking money and splurging on a treat or a vacation. For others, it means paying bills. For another group, it means taking the money and using it to pay bankruptcy fees, escaping debt that has proven too big to maneuver.

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Bankruptcy Lawyer Bryan W. Stone answers the question: “What are my alternatives to bankruptcy?”

Anyone with a job understands that if you get paid you must pay taxes on what you earn. The same thing goes for those who receive other material benefits, even if it isn’t a paycheck, some tax must be paid for the benefit you received. An example of a situation where tax can be owed despite no cash changing hands is when a loan is forgiven. If a credit card company decided to settle a $25,000 debt for $15,000, you would need to report the difference, $10,000, on your taxes. Not only would you need to report the $10,000, but you’d be required to pay tax on the value of the loan that was forgiven. This leads to a question about the debt discharged in a bankruptcy. Do you have to pay tax on that too?

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Bankruptcy Lawyer Bryan W. Stone answers the question: “What are the pros and cons of bankruptcy?”

A federal judge in New Jersey just reminded us of the power the Internal Revenue Service can retain over us all, even in bankruptcy. The judge recently threw out a defunct law firm’s lawsuit that accused the IRS and Treasury Department of illegally trying to collect taxes during a bankruptcy proceeding. Although the person bringing the lawsuit was an attorney, he apparently lacked the sufficient bankruptcy law experience to successfully protest the IRS’s oversteps, highlighting the dense and difficult nature of the bankruptcy process.