Thomas F. Miles, Attorney and Counselor at Law
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Chapter 7 bankruptcy can eliminate tax debt for some

Many California readers will have heard media coverage of a recent phone scam in which individuals have defrauded thousands of people who believed that they were making payments on outstanding tax debt. The matter has drawn the attention of the Treasury Inspector General for Taxpayer Administration, and an official statement has been issues warning taxpayers about the scam. For those who owe a significant tax debt, the stress associated with that debt burden can lead some to take drastic actions to pay down the debt, including falling victim to these types of scams. Many are unaware that filing for Chapter 7 bankruptcy can lead to the discharge of tax debt.

The recent scam has involved phone calls to as many as 20,000 American consumers. The callers pose as employees of the Internal Revenue Service, and demand payment of outstanding tax debt. They often use intimidation tactics to coerce consumers to pay part or all of the balance owed.

The scammers insist that payment must be made by means of a prepaid credit card or through a wire transfer. Consumers are warned that the Internal Revenue Service never asks for payment via either of those methods. In addition, the IRS initiates contacts with taxpayers through the mail, not over the phone. IRS agents also would never use intimidation or threats to collect unpaid tax debt.

Consumers who are struggling with high levels of tax debt should be aware that there are debt relief options that could be of assistance. One such option is a Chapter 7 bankruptcy filing, which can lead to the elimination of tax debt that meets certain requirements. Any California consumer who is contacted by phone in relation to unpaid tax debt should tread very carefully, and should report the incident to the Internal Revenue Service.

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

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Thomas F. Miles, Attorney and Counselor at Law
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