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Tax Overview

Modesto, California Tax Attorney : An Overview of the Practice at the Thomas Hogan Law Office

The Thomas Hogan Law Office handles a wide range of tax disputes for individuals and businesses in Stockton and the surrounding communities. A Certified Public Accountant, Mr. Hogan brings over 25 years of practice experience to his clients. He is admitted in state and federal courts in California, as well as the Tax Court. Contact the Thomas Hogan Law Office to schedule a free fifteen-minute consultation.

Tax Fraud and IRS Audits

If you have been notified that the IRS plans to conduct an audit of your tax filing, or if you have been criminally charged with fraud related to a tax filing, Mr. Hogan will aggressively protect your interests. For more information, see his tax fraud and representation in IRS tax audits page.

Offers in Compromise

When you have been assessed with a substantial tax bill, it is sometimes possible to wipe your tax slate clean at an enormous discount. If you qualify for something known as the offer in compromise, referred to as an “offer” or OIC, the IRS has been known to accept as little as 1% of the amount owed on a tax bill and call it even. You must, however, file a specific form to apply for an OIC. In most instances, you will also want to file substantial documentation to support your request for an OIC. Attorney Hogan will guide you through the process, maximizing your chances of reducing your tax bill. See his offers in compromise page to learn more.

Tax Avoidance Strategies

Attorney Hogan helps businesses implement strategies to manage tax liabilities proactively, including the use of leased employees and independent contractors to manage employment tax liability. He also works with individuals and businesses that have been assessed with tax bills, helping them use a variety to strategies to reduce or discharge any amounts due. Your options may include an OIC, bankruptcy, amendment of tax returns, an installment agreement or an appeal. To learn more, see his tax avoidance strategies page.

Business Tax Disputes

Mr. Hogan represents businesses that are involved in tax disputes, from controversies involving EDD taxes to sales tax matters. See his business tax page for more information.

Bankruptcy Options

Though bankruptcy is rarely available as a way to avoid a tax obligation, Mr. Hogan will review your situation to determine whether bankruptcy may help you manage your tax debt. Please click here to learn more about attorney Hogan’s bankruptcy practice.

Ability to Discharge Tax Liabilities in Bankruptcy: Limited Exceptions

Tax liabilities as a general rule can not be discharged in bankruptcy unless the taxpayer meets certain strict tests. Otherwise, an individual debtor will remain liable after bankruptcy to the extent non-dischargeable tax claims cannot be satisfied out of the bankruptcy estate.

Three Year Rule

The three year rule prohibits the discharge of taxes, measured by income or gross receipts, that relate to returns that were required to be filed three years, including extensions, before the date of the filing of the bankruptcy petition. The due date of the return and not the date when the taxes are assessed determines this priority. That is, tax returns must have bee filed three years and one day before the bankruptcy petition was filed in order to discharge income taxes. For example, an individual income tax return is due by April 15th, so to discharge the taxes, the return must have been filed by the due date, and this must be more than three years before the bankruptcy petition is filed.

Two Year Rule if Return is Not Filed or Filed Late

Under applicable bankruptcy law (Section 523(a)(1)(B), excepts from discharge a tax with respect to which either a return was not filed or was filed late and within two years of the petition. So, a taxpayer remains liable where one files his tax returns late but not more than two years prior to filing the bankruptcy petition. The tax debt is dischargeable if the underlying tax return that the liability arose out of was filed after two years before the filing of the bankruptcy petition. Case law supports a strict interpretation.

Penalties and Interest: Dischargeable

The code provides that a tax penalty or interest is dischargeable if it is related to a dischargeable tax liability. That is, interest and penalties become dischargeable if related with a tax year three years before filing the petition in bankruptcy.

Payroll Taxes, Withholding Taxes: Not excepted from Discharge

Any tax required to be collected or withheld and for which the debtor is liable in whatever capacity. This category would include sales tax, income tax withholding on wages and withholding on an employee’s share of social security tax.

Returns Prepared by the IRS

Although Bankruptcy Code Section 523(a) provides that returns filed late but after two years before the date of the filing of the bankruptcy petition can be discharged, IRC Section 6020(b) filings (where the IRS assesses the tax for the taxpayer) do not constitute return filing by the debtor. Consequently, returns not deemed filed by the debtor for purposes of bankruptcy rules can’t be discharged.

Eight Month Rule and OIC

Taxes measured by income or gross receipts assessed within 240 days before the date of filing of the bankruptcy petition can not be discharged. This provision would apply of the taxpayer did not timely file the tax return or if assessments had been made prior to the filing of the bankruptcy petition and within the 240 days. As to OIC’s, the 240 day period is extended for the time, plus 30 days if an OIC is pending.

For an experienced tax attorney in Modesto and the surrounding communities, contact the Thomas Hogan Law Office to schedule a free fifteen-minute consultation. Mr. Hogan’s office is open Monday through Friday, 8:30 am until 5:30 pm. Evening and weekend appointments are available upon request. The firm accepts Visa, MasterCard, Discover and American Express.

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