Archive for March, 2015

Utah Bankruptcy – Saving Your Business . . . Income and Withholding Taxes You Owe as the Business Owner of a Sole Proprietorship

If you want your Utah business to keep operating but owe too much in taxes, buy some time while protecting  that business with a Chapter 13 case .   Chapter 13 Protects Personal and Business Assets and Income In contrast to Chapter 7 “straight bankruptcy,” Chapter 13 “adjustment of debts” is not about a quick liquidation of assets for the benefit of your creditors. Rather it’s about preserving assets and protecting your earning capacity so that you can pay debts that need to be paid—such as recent income taxes and all withholding taxes. And as necessary Chapter 13 reduces debts…

Utah Bankruptcy . . . Income Taxes a Utahn Expects to Owe for the Current Tax Year

You can put into your Utah bankruptcy case the taxes you expect to owe for a portion of the tax year, by filing a partial-year tax return.   Income Taxes Owed During the Current Ongoing Tax Year If you’ve had your income tax returns prepared for last year and you owe a substantial amount of taxes for that year, you could very well end up also owing for the current tax year. For example, you may owe for last year because you did not have enough income taxes withheld by your employer. Or you did not pay enough quarterly estimated taxes…

Utah Bankruptcy . . . Unpaid Employment Taxes Allegedly Owed by a Non-Owner of the Business

You can be held liable for the IRS Trust Fund Recovery Penalty in Utah — all the unpaid employment taxes—without being an owner of the business.   About a month ago we addressed how bankruptcy handles employment taxes—those withheld from employees’ paychecks for income taxes, Social Security, and Medicare taxes, but then not paid over to the IRS or Utah State Tax Commission by the owner of the business. In a sole proprietorship—an unincorporated business owned and operated by one person—that one person is personally responsible for all of the business’ debts. That includes the debt for any unpaid employment taxes.…

Utah Bankruptcy . . . What if you have an Income Tax Installment Agreement that You Are about to Break?

It’s quite easy to get into an IRS or Utah State Tax Commission monthly payment plan. But then what if you can’t make the payments, or if you owe more taxes the next year?   If You Owe Income Taxes, Consider Entering into an Installment Agreement If you owe income taxes that you can’t pay any other way, look into paying it off through a monthly installment agreement entered into directly with the IRS or the Utah State Tax Commission. This option is particularly sensible if you don’t have other serious debt problems, can reliably make the required monthly payments, and…

Utah Bankruptcy . . . Income Tax Levies

A tax levy is an abrupt way the taxing authorities make you to pay a tax in Utah by taking your assets or income. Stop levies through  a Chapter 7 or 13 Utah bankruptcy.   A Levy is a Seizure A tax “levy” may not sound much different than a tax “lien,” but they are hugely different. The recording of a tax lien, as bad as it can be for its own reasons, is simply the IRS or state taxing authority legally making your assets into security for your payment of the tax you owe. A lien in the amount of…

Utah Bankruptcy . . . Income Taxes in a Chapter 13, Even Those that Could Be “Discharged” under Chapter 7

We show why most of the time you don’t pay more to get rid of taxes in a Chapter 13 case, including those that you could simply write off in a Chapter 7 case.   Our last two blogs have been about how to choose between Chapter 7 and Chapter 13 if you have more than one year of income tax debts, including some that can be discharged (legally written off in bankruptcy) and some that can’t. In general, Chapter 7 is better if all your taxes qualify for discharge (usually by being older). That’s because then in a matter…

Utah Bankruptcy . . . Both Income Taxes that Can Be “Discharged” and Those that Can’t — Chapter 13

If you owe older and newer taxes in Utah, how can you write off all or most of the older and be protected while making  affordable payments on the newer?   In our last blog post we asked whether Chapter 7 or Chapter 13 is better if you owe some income taxes that can be written off (“discharged”), but also some that can’t be discharged, (Tax debts can be discharged mostly because they’re older, or can’t mostly because they’re newer.) Chapter 7 “straight bankruptcy” usually quickly discharges those taxes that can be, in a matter of only 3 or 4 months.…

Utah Bankruptcy . . . New and Old Income Taxes — Those that Can Be “Discharged” and Those That Can’t

If you’re behind on income taxes in Utah, covering more than one tax year, which is better: Chapter 7 or Chapter 13?   If you owe income taxes, you may well owe for more than one tax year. If you do, bankruptcy could treat each of your different tax debts differently. One or more years of your taxes may be handled better in a Chapter 7 “straight bankruptcy” case while the rest may be better in a Chapter 13 “adjustment of debt” case. If so, how do you choose between those two? Today we’ll start with Chapter 7. “Discharge” Some Taxes,

Utah Bankruptcy . . . Income Taxes that Your Ex-Spouse Was Required to Pay but Is Now Paying through a Chapter 13 Bankruptcy Case

When it’s good for you that your Utah ex-spouse is filing a Chapter 13 case, and how to keep it good.   This blog post follows up on our last one of a couple days ago. There we introduced what happens when your ex-spouse is required by your divorce decree to pay some joint income tax debt, but fails to do so and then files a Chapter 13 “adjustment of debts” bankruptcy case. Let’s pick up where we left off. We finished by saying: [If your ex-spouse] has filed a Chapter 13 case and all the joint taxes are of the…

Utah Bankruptcy . . . Income Taxes that Your Ex-Spouse Was Required to Pay but Is Now Handling through a Chapter 13 Case

What can you do if your Utah ex-spouse is dealing with the tax authorities through a Chapter 13 bankruptcy?   What if your ex-spouse was ordered in your divorce decree to pay your joint income taxes, but isn’t paying. And now that he or she has filed a Chapter 13 “adjustment of debts” case, where does that leave you? Where that leaves you depends on what kind of income tax you owe and how Chapter 13 treats that tax. We’ll get to that in a minute. But let’s first get a couple things straight. First, the Divorce Decree Did Not Get