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    Millertyme's Avatar
    Millertyme Posts: 3, Reputation: 1
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    #1

    Aug 11, 2007, 12:32 PM
    Bankruptcy and the IRS`
    Can bankruptcy stop taxes owed to the IRS if it's thousands of dollars being owed? Example: $70,000 worth of taxes owed because a 1099-C was given after foreclosure on multiple investment properties.
    slowandeasy's Avatar
    slowandeasy Posts: 353, Reputation: 14
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    #2

    Aug 11, 2007, 12:58 PM
    A bankruptcy attorney should be able to answer that one. In our state many first time visits are free so that questions like that can be answered.
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,301, Reputation: 7692
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    #3

    Aug 11, 2007, 01:20 PM
    It is a maybe, normally no IRS debts are not discharged there are harrdship exceptions, but they are looked at on a case by case basis.
    So you will not know for sure until you file and go to the hearings
    dlc's Avatar
    dlc Posts: 10, Reputation: 3
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    #4

    Sep 14, 2007, 06:25 PM
    Quote Originally Posted by Millertyme
    Can bankruptcy stop taxes owed to the IRS if it's thousands of dollars being owed?? Example: $70,000 worth of taxes owed because a 1099-C was given after foreclosure on multiple investment properties.

    You might want to look into an offer in compromise with the IRS. It could possibly reduce the amount of tax, depending upon your situation and set up a payment arrangement.
    Don't forget you may have state taxes on this as well, unless you live in a state with no income tax.

    If the debt was included in the bankruptcy, then if would not be subject to taxes. Also, a 1099C is not subject to the tax if you can prove insolvency.
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