These are the IRS Transcript codes for bankrupting taxes. To bankrupt the income or dischargeable portion of a trust tax you have to obtain the tax transcript and review these key codes. These are the major codes you need to know to analyze when and how to file bankruptcy and discharge income and trust taxes. Here is our outline on How to bankrupt income taxes and major helpful IRS forms
But these are not all of the tax codes to have a complete understanding of your tax transcript. Never trust your memory. Get a copy of the tax transcript and then look for these important codes which trigger tolling, traps and other problems with the IRS. Do not trust the IRS collector to tell you the truth. If you make a mistake you will owe the tax and he is paid on how successful he is in collecting.
We suggest getting your tax transcripts and looking for these codes if you intend to discharge your income taxes. You must use a qualified bankruptcy and tax attorney which understands tax because you never want to missing the date by one day is fatal. Many attorneys just “file the bankruptcy petition”. You don’t want to just hope the tax is discharged. Filing bankruptcy is more like a chess game where strategy and timing has to be perfect.
There is an IRS pocket guide of the codes which you can download from the department. However it is 17 pages long. You don’t need to know every code to evaluate a tax transcript for the purpose to bankrupting the debt. Be sure to look for the assessment codes. These are the major transcript codes that may 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 stopped 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 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. Any investigator will know if you have asked for the transcript and it will be sanitized.
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 insure 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.