It’s a brand-new year and a brand-new tax season. There are some factors affecting tax returns this year, including a delay in processing refunds of those claiming the earned income tax credit (EITC) and additional child tax credit (ACTC). These refunds are being held until February 15, regardless of the filing date, as a safeguard against identity theft and tax fraud. This delay will certainly affect those with lower incomes and children, but there are also other factors that can affect your tax refund. The term “offset” is one that is unfamiliar to many people. However, it is one of the biggest factors affecting tax returns.
Topics: IRS Debt
Q: Hi, I am curious about what a bankruptcy attorney thinks about Donald Trump’s bankruptcies. Is it really possible that Trump hasn’t paid the IRS taxes in 20 years because of it?
I have to tell you that I hear this one all the time. In fact, it is possible to discharge some portion of federal, state, and local income taxes in your bankruptcy along with any penalties or interest that are attached. However, this is not a blanket statement.
First and foremost, you need to know this: If you are under audit, filing for bankruptcy will not stop the audit. All that filing for bankruptcy will do is suspend any collection action while the bankruptcy is pending - and that is only if there is no Stay of Relief filed by the IRS. The filing of bankruptcy is a serious matter and the court tends to look poorly upon people playing games with the process – case in point is this fool here.
It’s going to be great when that refund hits your bank account, isn’t it? You can pay down some bills, treat yourself to a new big screen, or maybe take a cruise in case the weather isn’t warm and sunny enough in SoFlo for you. Sounds terrific, doesn’t it? However, there might be a big LOL NOPE lurking out there and that refund you’ve been counting on might disappear right down the rabbit hole. You see, there’s this thing called garnishment, and the IRS and the Treasury might have plans for your refund that don’t include any fun stuff. This is called the Treasury Offset Program and there are some specific reasons that your refund might be garnished.
About Chad Van Horn
Chad T. Van Horn, Esq. is a South Florida business leader and founding partner attorney of Van Horn Law Group, P.A. Through a combination of dedicated philanthropy, spirited entrepreneurship and legal expertise, he applies his resources and network to helping people. Learn more about Chad Van Horn.