Debt settlement programs rarely work as advertised and forgiven credit card debt is treated as an income by the IRS so, you might end up having to pay taxes on it.
Bankruptcy can help reduce or eliminate penalties and interests associated with outstanding tax debt.
With bankruptcy, discharged debts have no income tax consequences and it is excluded from gross income. With other debt relief programs you risk the possibility of receiving a tax bill after your debt has been canceled, but that’s not the case with bankruptcy.
Without doubt you should still file your taxes. Even though you aren’t able to make payments, filing your taxes and not paying immediately will put you in a much better position than if you don’t file at all.
Taxing authorities must immediately stop garnishing your wages as soon as they receive the notification of bankruptcy, no matter the type of tax that you owe.
They are not obligated to ensure that you received the Notice. It is possible that the Notice was mailed to your previous mailing address.
Yes, they’re permitted to send the notice to your home or work place.
The IRS first has to send you a Notice and Demand for Payment. If you refuse or neglect the notice, they’ll then issue a Final Notice.
No, it would be against the law. Your employer was sent an official notice giving them the amount to hold back and cannot refuse the garnishment.
Yes, it is legal for the IRS to garnish your wages due to taxes owed. According to federal law, the payments are limited by 25% of your income. However, they’re permitted to continue garnishing your wages until the entire debt is paid in full.