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Tax debt can be discharged through Chapter 7 bankruptcy

When financial trouble arises, Florida consumers often experience a snowball effect in which debt mounts, stress levels rise and the need for debt relief becomes even more urgent. In many cases, distressed consumers fall behind on their tax obligations, and have to add tax debt to the list of outstanding financial accounts. While Chapter 7 bankruptcy can lead to the elimination of tax debt, many consumers spend a great deal of time and effort trying to repay those debts on their own, even as their overall financial standing worsens.

The IRS and the Treasury Inspector General for Taxpayer Administration have recently become aware of a large-scale scam involving the fraudulent collection of unpaid tax debt. Those behind the scam have contacted more than 20,000 individuals in an effort to convince them to pay their past-due taxes. The scammers use intimidation tactics to coerce individuals to make immediate payment. They then insist that the payments be made using prepaid debit cards or through wire transfers.

The IRS has made efforts to inform taxpayers of the risk of falling prey to these types of scams. Anyone who is contacted by an individual claiming to represent the IRS should be aware that the agency initiates contact via mail, not over the phone. The IRS will also never ask for credit card information over the phone, or require that payment be made through a debit card or wire transfer.

When dealing with outstanding tax debt, Florida consumers can feel a great deal of pressure to meet their obligations. In many cases, however, repayment is simply not possible, and the California consumer must pursue other debt relief options. Filing for Chapter 7 bankruptcy is one of those options, and deserves careful consideration.

Source: Illinois News Online, "Government warns of ???Largest Ever??? Phone Fraud Scam Targeting Taxpayers", , May 2, 2014

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