# Filing for Chapter 7 bankruptcy to avoid paying taxes?



## DontGoToPaterson (Mar 15, 2019)

I made over 100k last year, I'm thinking about doing this. Smart?


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## UberBastid (Oct 1, 2016)

IRS CAN be discharged in BK.
I've done it.
For SEVEN figures.

Some special circumstances exist. One that i remember, and think it still if effect is that you have to have FILED and given the opportunity for IRS to collect for ... I don't remember ... seven years? three years? I dunno. 
I know that it can be done.
I know that it takes a lawyer with a special set of technical skills; but they out there - your not the first.
The IRS is the best organized and best equipped terrorist organization on the planet. Don't fight them alone. You'll lose. Big.

Don't do this with a regular, cut rate, 'we can save you from the IRS' type attorney. It is NOT a regular BK. 
The right lawyer is worth it.

Talk to a lawyer first.


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## 58756 (May 30, 2016)

DontGoToPaterson said:


> I made over 100k last year, I'm thinking about doing this. Smart?


When it comes to IRS or Student loans, the bankruptcy can't help you escape the debt. Only death is the only way out usually. They forgive it upon death.


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## Seamus (Jun 21, 2018)

DontGoToPaterson said:


> I made over 100k last year, I'm thinking about doing this. Smart?


I find it funny when people think they can simply and easily outsmart the IRS, usually it doesn’t end very well!  Also, if you made that much and didn’t file quarterly estimated payments you’re probably going to get hit with fines as well!

It’s not so simple. There are several legal conditions that must be met to get tax debt discharged. Your first problem is it must be at least 3 years old so if the purpose is to get rid of 2021 tax debt you can’t file chapter 7 until 2024.

There are a lot of other issues as well. You need a good tax lawyer and must pay them an out of pocket retainer up front, not like a lawsuit. $$$.

Do yourself a favor, if your going to make good money then get yourself a good accountant and lawyer. Spending a little on good professional help up front is much cheaper than cleaning up the mess on the back end.


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## UberBastid (Oct 1, 2016)

Ozzyoz said:


> When it comes to IRS or Student loans, the bankruptcy can't help you escape the debt. Only death is the only way out usually.


In fact that's not true.
In reality ... it is.

You CAN go BK on an IRS debt. Google it. 
IRS actually has a special section that deals with this.

But, op said he "made $100k last year". If he made it last year, he can't go BK on it. He has to FILE and then wait TWO YEARS to give the IRS the chance to collect. Oh, and he won't owe $100k. If he files on time, he may owe $25k. 
So, he will have two years of hell under the jack boot of the IRS (garnishing wages, tapping bank accounts) and THEN he'll spend $10k on a lawyer to do the BK. For twenty five thousand dollars? 

I don't believe it's worth it in his case.

File on time. Call and make payment arrangements.
Don't agree to a payment you are not sure you can make, and never, ever miss a payment after the agreement.
They get very aggressive if you do that.

Believe me, I have fought those bastids for decades. I'm not sure if they fight dirty, or incompetent. But it was over a LOT more money than that. My beef was in the millions.
It took years, but I won.
.


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## Frontier Guy (Dec 27, 2015)

DontGoToPaterson said:


> I made over 100k last year, I'm thinking about doing this. Smart?


What else are you planning to surrender? In bk, you have to list all assets, debt, and any asset or bank account worth over a certain amount (based on levels set in your state, in Colorado any vehicle, asset, bank account worth over $5,000) the trustee can and sometimes will seize to pay debts. Also, depending on various circumstances, your lawyer or the trustee can reject a 7 filing and force a 13 filing. If your RS vehicle is worth $15k, and your state is a $5k state, the trustee can order it sold, you get to keep the first $5,000, they get the rest, and they will handle the sale, not you.

I just did a 13 last year, the IRS is automatically notified in a bankruptcy case, even if they aren’t included, and if they are, they will file a motion and they will attend the creditors meeting to reject your filing, you almost have to be destitute and living in your car, and uncollectable to get the IRS to go along. They will force a 13 and you will make payments to them.


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## DontGoToPaterson (Mar 15, 2019)

Frontier Guy said:


> What else are you planning to surrender? In bk, you have to list all assets, debt, and any asset or bank account worth over a certain amount (based on levels set in your state, in Colorado any vehicle, asset, bank account worth over $5,000) the trustee can and sometimes will seize to pay debts. Also, depending on various circumstances, your lawyer or the trustee can reject a 7 filing and force a 13 filing. If your RS vehicle is worth $15k, and your state is a $5k state, the trustee can order it sold, you get to keep the first $5,000, they get the rest, and they will handle the sale, not you.
> 
> I just did a 13 last year, the IRS is automatically notified in a bankruptcy case, even if they aren’t included, and if they are, they will file a motion and they will attend the creditors meeting to reject your filing, you almost have to be destitute and living in your car, and uncollectable to get the IRS to go along. They will force a 13 and you will make payments to them.


well luckily I'm a gold stacker and spend all my RS money on GOLD. I have over 120K in gold assest that they will not even know about. 

My two cars are fully paid off. they take those? I thought unless I have payments they can't take it.

I rent. 

So I don't have an assets at all.


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## Frontier Guy (Dec 27, 2015)

Fraud during a Bk filing is a felony, obviously you’ve never filed BK before. You’ll have to submit your last 6 months, maybe 12 months of bank statements, brokers statements, etc, your lawyer will review it. Oh, and 1 in 4 BK filings are independently audited within 6 months of the filing, and that audit, I just went through it, slightly more invasive. 3 yrs of paystub (W2 or 1099), 3 yrs of bank statements, 3 yrs of tax filings, they had an inspector out to look at both my cars, my house and a couple other questionable assets, they just completed the report in December, my lawyer and I haven’t seen it yet.

if your cars are worth over a certain amount, yep, they can, if your single and own two cars, they will seize or order sold one of them. Yes, there are some things you can hide that they won’t question, unless they suspect fraud, at which time they can get even more intrusive, including search warrants


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## UberBastid (Oct 1, 2016)

And, an 'audit' by the IRS Criminal Investigations Unit is ... um, intrusive.
Invasive. And no lube is used.
Believe this, by the time they done you have no secrets.

And, don't talk to them. Let your lawyer do it.
If you tell an investigator the sky is blue, and it was a cloudy day ... yer in trouble. 

If I was OP I would NOT open this can of worms.
Make a hundred dollar per month payment for the rest of your life and they'll consider you to be "uncollectable" and leave you alone.

File and send $100
Every time they send you a letter, send $100
Every time they send a bill or statement, send $100

After a year of so of that, he'll get a call or an invite to call them. They'll ask a few questions "No, I don't own real estate, I'm an Uber driver, I use my car as a tool, I don't own a boat or a plane of a lot of stocks. I am an Uber driver."
Then they'll know there's no blood in this guy, and leave him alone.

THAT'S what I would do.
(and have done)


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## UberBastid (Oct 1, 2016)

I had an IRS investigator (two of em) come to my job once. Flash federal badges and 'ask' to talk to me.
How do you think that went over at work? Hmm.

Now, they weren't supposed to do that. Papers had been filed giving my attorney 'power' and informing that they were not to contact me without the attorney being aware.
They didn't care about the law.
"I don't see any paperwork like that in my file."
"Get the hell away from me or I'll call the cops and file a complaint for trespass."

Disregard for the law? Incompetence?
Bastids, yea.

.


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## SHalester (Aug 25, 2019)

well, if you don't want a loan for a length of time; enjoy paying for a lawyer.....go for it. But if you ever want to say become a home owner, you are screwed for many years. Unless your gold really appreciates and you pay cash, that is.


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## UberBastid (Oct 1, 2016)

SHalester said:


> well, if you don't want a loan for a length of time; enjoy paying for a lawyer.....go for it. But if you ever want to say become a home owner, you are screwed for many years. Unless your gold really appreciates and you pay cash, that is.


And don't buy it in your name, form a corporation (Nevada or Delaware).
And able to show at least six months 'ownership' of that money by providing bank statements.

And, I might add .. be prepared to explain where all that money came from. And especially since a few months before you swore you had no assets.


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## Alltel77 (Mar 3, 2019)

Get an attorney it doesn't just go away like most things in regular chapter 7. I've heard best case is an offer in compromise but those generally aren't approved either. They were threatening to levy me or seize my property last year all over $900 owed from a previous year and kept sending letters that contradicted each other. One year they tried to say I didn't report a payment when I did , the company that sent me the payment changed ownership. I had to write 5 letters. Don't bother calling them either they don't answer or if they do it's outsourced and it's like speaking to one of the idiots at Comcast.


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## Ted Fink (Mar 19, 2018)

@DontGoToPaterson this is easy. Sell some of your gold and pay your damn taxes. Resolved.


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## Frontier Guy (Dec 27, 2015)

UberBastid said:


> And, an 'audit' by the IRS Criminal Investigations Unit is ... um, intrusive.
> Invasive. And no lube is used.
> Believe this, by the time they done you have no secrets.
> 
> ...


I didn’t even get to the IRS audit part, they usually do those dry, or perhaps a coating of 50 grit sandpaper, I’m just talking about the independent BK audit, I’ve been through an IRS audit too, lots of fun.


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## CarpeNoctem (Sep 12, 2018)

A lawyer can qualify but yes, the debt for taxes has to be on your books before it can be dismissed in BK. If you file BK and it is final and then file your taxes, it's a different 'set of books' and the BK does not apply. You starting over will start with your tax bill.


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