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Filing a bankruptcy petition can often but not always erase tax debts. It is useful to buy time from the IRS and make them agree to a payment plan suitable to you. It is up to an individual to decide the practical, moral and ethical implications for choosing bankruptcy to deal with the debt burden. Bankruptcy can be useful in contesting the amount or validity of a tax liability when other judicial forum can not be used. A properly timed and structured bankruptcy can discharge many tax liabilities, thus giving a financially distressed individual or company a “fresh start”.
Note: We are not legal advisors, and our advice is only limited to tax planning. Please consult your attorney for filing a bankruptcy.
Bankruptcy Tax Planning
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