Managing Tax Debts Through Bankruptcy: Discharge ability, Timing Traps, and Strategic Planning (On-Demand)

Course Description

This program explores how bankruptcy can be used strategically to manage and resolve tax debt issues for individuals and small business owners. The presentation focuses on the intersection of consumer bankruptcy and tax resolution, including dischargeability of income tax debt, priority versus nonpriority tax claims, federal tax liens, and the practical application of the 3-2-240 timing rules. Attendees will learn how tolling events, late-filed returns, substitute for returns, audits, and reassessments can impact dischargeability analysis and case strategy.

The course also examines when Chapter 7 or Chapter 13 may be the more effective solution for tax debt, how bankruptcy interacts with IRS collection alternatives such as installment agreements, offers in compromise, and currently not collectible status, and common pitfalls attorneys encounter when advising clients with significant tax liabilities. Using practical examples and hypotheticals, the program provides guidance on evaluating IRS transcripts, identifying timing traps, protecting assets, and developing coordinated strategies that combine bankruptcy and tax resolution tools to achieve better outcomes for clients.

Syllabus

1. Introduction to Tax Debt in Bankruptcy
   • Types of tax debt and why tax cases require specialized analysis
   • Priority vs. nonpriority taxes
   • Common misconceptions and strategic considerations
2. Dischargeability of Tax Debt
   • The 3-2-240 rules
   • Late-filed returns, substitute for returns, and reassessments
   • Tolling events and timing traps that affect dischargeability
3. Chapter 7 vs. Chapter 13 for Tax Issues
   • When Chapter 7 is effective for older tax debt
   • Using Chapter 13 to manage priority taxes and collection activity
   • Asset protection and payment strategy considerations
4. IRS Collections, Tax Liens, and Enforcement Issues
   • Federal tax liens and survival after discharge
   • Levies, garnishments, and passport certification issues
   • IRS collection timelines and practical concerns
5. Bankruptcy vs. IRS Resolution Options
   • Installment agreements, CNC status, and offers in compromise
   • Coordinating bankruptcy with tax resolution strategies
   • Determining when bankruptcy is or is not the best solution
6. Practical Strategies, Case Evaluation, and Common Pitfalls
   • Reviewing IRS transcripts and identifying key dates
   • Strategic timing considerations before filing
   • Practice tips, hypotheticals, and common attorney mistakes