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Can the IRS Ignore the Bankruptcy Stay?

Can the IRS Ignore the Bankruptcy Stay?

No. Immediately after a bankruptcy petition is filed, virtually every type of collection activity is enjoined by the Federal Bankruptcy Court. An order is immediately entered by the bankruptcy court prohibiting nearly all creditors from taking any action to collect on a debt. The IRS is prohibited from collecting after the petition has been filed. The IRS can continue to audit tax returns during a bankruptcy proceeding and may determine that a tax is due. However, the IRS can not start or continue enforced collection.

The bankruptcy stay is powerful protection from the IRS.

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If you have questions about the personal bankruptcy process, we are here for you. Contact us today online or by telephone at (888) 910-6652 to schedule your free initial consultation with an experienced bankruptcy lawyer.