December 3, 2010

California Tax Debt & Bankruptcy

A Sacramento bankruptcy attorney explains California tax debt and bankruptcy.

A lot of very wealthy and successful people can find trouble with California tax debt. Some very successful people such as successful business people and others have been struggling to pay off their California tax debt for years. The tax debt can and usually is caused by bad accounting practices. The California Department of Revenue tries to do everything they can in order to collect the revenue that it takes in order to properly run state government. A lot of people may need to hire a tax debt relief attorney in order to properly deal with these problems.

The truth is that bankruptcy will often not end up helping your problems when it comes to paying off your California taxes. People may end up talking about a wide variety of different taxes out there, many people open up franchises in the state of California. This means that you may find trouble when it comes to the franchise taxes that people may owe to the state. A good California tax debt attorney is also going to be able to help out with property taxes issues that a person may be facing, whether people are talking about commercial or residential property. The ultimate goal should be that a person will not have to end up filing bankruptcy over the tax debt.

We can answer all your questions regarding filing a Chapter 7 bankruptcy, a Chapter 11 bankruptcy, a Chapter 13 bankruptcy, bankruptcy litigation, legal debt settlement, mortgage modification, lien stripping, cram down, stopping a foreclosure, wage garnishment, discharging a debt, asset protection, etc. If you need help regarding a bankruptcy in Sacramento, call us at 916.792.6025 or and we will be more than happy to offer you a free consultation over the phone. You can also fill out a free online evaluation at our website,, or request a free face to face appointment at a Bankruptcy Law Firm office location close to you. We have bankruptcy attorneys located throughout California and Oregon to assist you with all your debt resolution needs.

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August 10, 2010

Tax Debt Bankruptcy Litigation

Tax Debt Bankruptcy Litigation

Income tax debts may be eligible for discharge under Chapter 7 or Chapter 13 of the Bankruptcy Code. Filing for bankruptcy is one of five ways to get out of tax debt, but you should consider bankruptcy only if you meet the requirements for discharging your taxes.

Chapter 7 provides for full discharge of allowable debts i.e. those that are classified as priority unsecured and meet the criteria below. Chapter 13 provides a payment plan to repay some debts, with the remainder of debts discharged. Again those taxes discharged must meet the criteria found below.

Not all tax debts are capable of being discharged in bankruptcy. The debtor must have tax debts that meet five criteria for discharge.


The due date for filing a tax return is at least three years ago.

The tax return was filed at least two years ago.

The tax assessment is at least 240 days old.

The tax return was not fraudulent.

The taxpayer is not guilty of tax evasion.

A business is responsible for trust fund taxes. A trust fund tax is money withheld from an employee's wages (income tax, social security, and Medicare taxes) by an employer and held in trust until paid to the Treasury.

When you pay your employees, you do not pay them all the money they earned. As their employer, you have the added responsibility of withholding taxes from their paychecks. The income tax and employees' share of FICA (social security and Medicare) that you withhold from your employees' paychecks are part of their wages you pay to the Treasury instead of to your employees. Your employees trust that you pay the withholding to the Treasury by making Federal Tax Deposits. That is why they are called trust fund taxes.

In fact, section 6672 of the Internal Revenue Code authorizes a 100% penalty to be levied against the responsible person. Section 6672(a) states: “Any person required to collect, truthfully account for, and pay over any tax imposed by this title who willfully fails to collect such tax, or truthfully account for and pay over such tax, or willfully attempts in any manner to evade or defeat any such tax or the payment thereof, shall, in addition to other penalties provided by law, be liable to a penalty equal to the total amount of the tax evaded, or not collected, or not accounted for and paid over.”

Needless to say, the penalty is brutally harsh. It’s absolutely foolish for you to fool around with this loaded gun penalty provision. Therefore, if you believe you could be subject to a Trust Fund Recovery Penalty (TFRP) then call O.W.D Law immediately. Don’t wait until it’s too late. We can give you a free consultation and explain to you, in plain talk, how you can solve this problem and avoid incurring the wrath of the IRS.

Liability for trust fund taxes (the portion of an employee's wages that a employer withholds from the employee's paycheck) is not dischargeable regardless of the age of the tax.

If you have questions regarding Bankruptcy in Sacramento please contact us at (916) 492-6020 in Sacramento or (916) 724-1690 in Roseville for a free consultation or visit and we can connect you with one of our experienced Sacramento Bankruptcy Attorneys. After you have spoken with one of our Sacramento bankruptcy attorneys, we can schedule you for a free face to face appointment in an office location nearest you. Our team of Sacramento Bankruptcy Lawyers can assist you with all aspects of your bankruptcy or legal debt settlement case. If you have questions about filing a Chapter 7 bankruptcy, a Chapter 11 bankruptcy, a Chapter 13 bankruptcy, or would like to learn more about bankruptcy litigation, legal debt settlement, mortgage modification, lien stripping, cram down, stopping a foreclosure, wage garnishment, asset protection, discharging a debt, etc. we can help! We have bankruptcy attorneys located throughout California and Oregon who can assist you with all of your debt resolution questions. Please feel free to complete our free online bankruptcy evaluation and we can quickly determine if you are a qualified candidate for bankruptcy. We look forward to hearing from you, Sacramento and Roseville!

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100% Money-Back Guarantee from Sagaria Law

If the courts do not accept your bankruptcy filing because of an error on our part, we will refund 100% of your money, including the filing fee!

At Sagaria Law, PC we want to guide you on the path to financial freedom and realize this is not an easy task for most. We respect your devotion to better your circumstances even with financial hardship and thus are willing to guarantee that if you retain us, we will do everything we can, legally and ethically, to help you become debt-free.

The Fine Print

The Sagaria law guarantee covers everything that a bankruptcy law firm produces in order to successfully complete a bankruptcy filing. We guarantee that it will be done in a manner that is accepted for filing with the bankruptcy clerk's office.

There may be reasons beyond our control that may cause a case to be dismissed. Therefore, the 100% Money-Back Guarantee does not guarantee;

  1. That you will receive a discharge.
  2. That you will receive a discharge of all debts or of any particular debt.
  3. That your case won't be dismissed for reasons not related to the paperwork being accepted for filing.
  4. That you, our client, will successfully complete all of your obligations including accurate disclosure of debts, completing your forms on time and attending your 341 meeting as scheduled.
  5. That you will not lose assets in chapter 7, or that creditors won't successfully argue for the repossession of collateral in chapter 13.
  6. That you will not encounter challenges of any kind to your bankruptcy case.

Take advantage of this offer. Get started now by completing your FREE online bankruptcy evaluation, accessible from our home page.

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