Welcome to our page about the IRS Transcript codes for bankrupting taxes. To bankrupt the income or dischargeable portion of a trust tax you must obtain the tax transcript and review these key codes. There are the most important codes to know for analyzing when and how to file bankruptcy and discharge income and trust taxes. Also, in this post is information on how to bankrupt income taxes and some helpful IRS forms.
IRS Transcript Codes for Bankrupting Taxes
Please know that these are not all the tax codes you need to know to have a complete understanding of your tax transcript. I also advise you to never trust your memory. Instead, get a copy of the tax transcript and look for these important codes that trigger tolling, traps, and other problems with the IRS.
Plus, never trust the IRS collector to tell you the truth because he gets his pay from his success in collecting from you. Unfortunately, if you make a mistake you will still owe the tax. To avoid this trap, if you intend to discharge your income taxes, we suggest getting your tax transcripts and looking for the codes.
Click on this link to download a 17-page IRS pocket guide of the codes. However, please be aware that you don’t need to know every code to evaluate a tax transcript for the purpose of bankrupting the debt. Be sure to also look for the assessment codes which are the transcript codes that might cause you problems in discharging the income tax.
⎆ Important IRS transcript codes.
• IRS Codes for Evasion
- 240- 616 Filing a false return
- 240-618 Evasion of tax payment
- 240-646 Willful
- 240-650 Intentional
- 240-668 Fraudulent failure to file
- 240-673 Filing a frivolous return
• IRS Tolling Codes
- 320 IRS Fraud Code
- 420 IRS Audit Code
- 480-XXX All 480 codes are OIC Offer in Compromise codes
- 520 Offer in Compromise which stops collections
- 520-XXX Pending litigation codes Bankruptcy, due process, pending litigation
- 608 IRS Statute of limitation has run code if the statute has not run yet look for the ASED date because it runs from the date of assessment.
- 900 series tend to be pending IRS criminal actions 910, 914, 916, 918 these are rarely on the transcript they give to you. Investigators know if you ask for the transcript and they will sanitize it.
⎆ Tricks and traps to discharging taxes in bankruptcy.
- If you are in no rush then you may want to wait a few extra days more than the calculation to ensure that you age the tax debt. The calculation uses the date the return was due, and business days so weekends, holidays and extensions may cause miscalculations.
- Avoid starting a personal war with the collector. They do note the file so more aggressive collections will be used if you threaten or are demeaning to tax department personnel.
You must use a qualified bankruptcy and tax attorney which understands taxes. Many attorneys just “file the bankruptcy petition”. But, you don’t want to simply hope the tax is discharged. You never want to miss the date because even one day might be fatal. You might even think of filing bankruptcy as a chess game where strategy and timing must be perfect to be successful.
Do you need help discharging your taxes? Contact my office right away to start the conversation. Nick C. Thompson, Attorney: 502-625-0905