I Filed Bankruptcy But Still Owe the IRS. – Wanda

“Dear Jim,

I was audited by its in 2006. It was because the tax preparer was listing me as single when I was filing head of household I am married but my husband worked seasonal. The irs sent me a letter stating I owed them $12,000. So they took my taxes.

I filed for bankruptcy I told my lawyer that I owed them its $12,000 he sent paper work to its stating this. They sent back that I owed $1200 . After two years my bankruptcy case was paid out in February.

So in august of 2009 the irs took my entire pay check. That when I found out I still owed them $12,000 as if I hadn’t paid nothing. I been paying every two weeks since then. I just lost my job in April.


Hi Wanda:

Magnifying Glass - Q&AFrom your scenario, it sounds like the bankruptcy did not forgive your taxes. In fact, for recent tax debts (less than three years old), bankruptcy is rarely an option to relieve tax obligations. If you still owe the $12,000, you should get into an arrangement with the IRS based on your ability to pay. If you have no ability to pay, you can request currently not collectible or an offer in compromise. However, you will need to provide proof of your financial situation.

In any event, you need to make these arrangements so that you are not levied. If you do not communicate with the IRS and make a definitive arrangement, the IRS will proceed to levy your sources of income and your bank accounts until your taxes are paid or you make other arrangements with them.

All the best,


Jim Buttonow is one of the resident debt experts here at GetOutOfDebt.org that helps people for free. Jim is a licensed CPA who spent 19 years with the IRS coordinating large compliance teams of IRS agents and specialized personnel. In the last 5 years, Jim has invented consumer and practitioner software and treatises on how to address many different tax issues. He has also represented many people before the IRS examination, collection, filing, and appeals functions. He currently assists taxpayers on an active pro bono tax practice aimed at serving people in need. He can be reached at IRSMind.com.

If you have a tax question you’d like to ask just use the online form. I’m happy to help you totally for free.

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Jim Buttonow, CPA/CITP, practices in the area of IRS and State tax controversy. He has more than 29 years of experience in IRS practice and procedure. Reach Jim at jim@buttonowcpa.com or through his website www.buttonowcpa.com

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