The short answer is it depends. Although the purpose of the bankruptcy system is to give a debtor a discharge of the debts it is unable to pay and to give that debtor a fresh start – in many cases, that debtor is still liable for tax debt even after filing for bankruptcy.
Our latest episode of our podcast, Talkin’ Tax, went in depth of the difference between Liens and Levies.
A lien is a legal claim against a Taxpayer’s property to secure payment of the tax debt. Meanwhile, a levy is a legal seizure of a Taxpayer’s property to satisfy a tax debt. If you want to learn more about the difference, check out our Lien vs. Levy podcast episode at https://fb.watch/7vBm9_4-P0/
The Internal Revenue Service announced on June 1, 2021 that it is currently accepting applications for the Internal Revenue Service Advisory Council (IRSAC) for terms that will begin in January 2022. Applications will be accepted through July 9, 2021. IRSAC members are appointed to three-year terms by the IRS commissioner. They also submit a report to the commissioner annually at a public meeting.
The aggressive compliance landscape started several years ago and slowed down due to Covid-19. However, in recent months tax practitioners are seeing an increase in compliance efforts and controversies throughout the world. It started in January 2017 when the IRS began a new approach to examination where they were targeting campaign issues that they think have potential for noncompliance. For example, the IRS began to target Code Section 965 which affects a lot of taxpayers. They also have the high-wealth initiative, which targets very wealthy individuals not only around the US, but around the world.
If you find yourself in a situation where you cannot pay your tax bill in full, you have a few options of what to do. But the first thing you should do is file your tax return or request an extension of time to file by May 17, 2021 even if you cannot pay it all. If you do not file your tax return or request an extension by May 17th you may face a failure-to-file penalty.