A person’s tax situation can also change in the years after they have filed bankruptcy.
San Jose, CA – People who are in financial trouble may have issues with both their tax situation and bankruptcy. There is often a great deal of overlap between declaring bankruptcy and later tax issues. A bankruptcy proceeding can help with the process to organize the individual’s finances and protect certain assets from government seizure while their debt is repaid. When this happens, there are lawyers involved in the sense that the government is represented in bankruptcy proceedings, and the person may want to get their own San Jose tax lawyers to protect their interests. Here are some things to be mindful of during times after declaring bankruptcy and filing taxes.
Defending against IRS accusations
When a person has serious financial trouble, the IRS may want to utilize their authority to seize property or bank accounts, intercept tax returns, and take money and property through other means if necessary. However, there are court proceedings that take place to ensure that the government has the right to do so before a judge will sign an order. California tax lawyers can defend a person who is in trouble with the government, and they may be able to settle the case through negotiations or other methods. A debt settlement can be very important, as this can end up saving the person a large amount of money versus the total amount that the government initially wants.
Filing taxes after bankruptcy
A person’s tax situation can also change in the years after they have filed bankruptcy. They will still need to file their returns as they always do. Changes may occur in the sense that some of their assets are now capable of being taxed. There may also need to be additional forms filed with the tax return to give the IRS notice that the person has previously filed for bankruptcy. Any Tax refunds received need to be used to pay off debt to creditors rather than for the individual’s personal use. Because of these issues and the potential for other problems, tax lawyers should be consulted by anyone who is unsure about how to file taxes following their bankruptcy. Estate planning lawyers may also need to give advice for those who have trusts or are planning to leave property through a will in the years following a bankruptcy. The estate can need to be managed differently depending on the outcome of the bankruptcy and related tax matters.
Getting connected with a local attorney
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