Tax Debt

Chattanooga Tax Debt Attorney

Experienced Tax Attorney Helping Clients Burdened by Tax Debt

If you face tax debt and are receiving threats from the IRS or the Tennessee Department of Revenue, it is important to explore your legal options. Depending upon your circumstances, you may be able to achieve tax debt relief by filing for bankruptcy.

At The Law Office of W. Thomas Bible, Jr., our Attorneys will work with you personally to help you determine if filing for bankruptcy is right for you. We have extensive experience handling tax debt issues for clients from Chattanooga and throughout Tennessee and North Georgia.

How Can You Prevent Wage Garnishment?

If you want to stop IRS wage garnishment, you have to act quickly and precisely, as the IRS has the power to seize a significant portion of your paycheck without a court order. While Tennessee law provides certain protections against general creditors, the IRS follows federal guidelines that are far more aggressive.

To stop the garnishment process, you must request a Collection Due Process hearing. Once you receive a “Final Notice of Intent to Levy,” you have 30 days to file. Filing this request on time usually puts an automatic stay on the garnishment while the Office of Appeals reviews your case.

You can then propose a monthly plan, which is the quickest way to release a levy. For debts under $50,000, you can usually set up a streamlined agreement over the phone, which triggers a levy release once the first payment is processed.

If the garnishment prevents you from paying for necessities, such as rent, food, and utilities, you can request a Currently Not Collectible Status (CNC status). This temporarily stops all collection actions due to financial hardship.

You can also submit an Offer in Compromise (OIC). An Offer in Compromise is an attempt to settle your tax debt for less than you owe, and garnishments are suspended while the IRS evaluates your financial situation.

Protected from Garnishment

The IRS uses exemption tables to determine how much you get to keep when wages are garnished. Anything you earn above this limit, the IRS takes.

  • Single: The protected amount is approximately $668.26 bu0weekly. Anything earned about this is sent to the IRS.
  • Married Filing Jointly: The protected exempt amount for married filing jointly is approximately $1,646.16 biweekly.
  • Bonuses and Commissions: Be aware that 100% of supplemental incomes, such as bonuses, overtime, and commission, is typically subject to the levy once your base exempt amount has been met for the pay period.

Are You Protected From Your Spouse’s Tax Debts?

There is a special IRS program that can protect you from being held responsible for a spouse’s or ex-spouse’s tax debt if they committed errors or omitted information on a jointly filed return without your knowledge. There are three types of IRS relief under these circumstances.

  • Innocent Spouse Relief: Relieves you of responsibility for additional tax, interest, and penalties if your spouse understated taxes by hiding income or claiming false deductions and credits.
  • Separation of Liability Relief: Divides the understated tax, plus interest and penalties, between you and your spouse based on who earned the income or claimed the deduction. This option is primarily for taxpayers who are now divorced, widowed, or legally separated.
  • Equitable Relief: This is a catch-all category for when you don’t qualify for the first two. It applies even to unpaid taxes if you can prove that it would be unfair to hold you liable.

To be eligible, you must meet the following requirements:

  • Joint Return: You must have filed a joint federal income tax return for the years in question.
  • The Knowledge Test: You must show that when you signed the return, you did not know, and had no reason to know, that there was an understatement of tax.
  • Attributable to Spouse: The error must be solely attributable to your spouse.
  • Exceptions for Spousal Abuse: If you knew about the errors but signed the return under duress, fear, or domestic abuse, the IRS may waive the knowledge requirement for Equitable Relief.

For Innocent Spouse Relief and Separation Liability, it is often required for you to file within two years of the date the IRS first began collection activity against you. By law, the IRS must notify your current or former spouse that you have filed for relief and allow them to participate in the process. There is no exception to this rule, even in the case of domestic abuse.

What Is the IRS Fresh Start Program?

The IRS “Fresh Start” program is an administrative framework designed to help taxpayers resolve federal tax debt without the need for bankruptcy. For Tennessee taxpayers, it provides specific pathways to settle debt and avoid property seizures.

To qualify for this program, you must:

  • Have filed all required federal tax returns for previous years.
  • If you are self-employed or a business owner, you must be up-to-date on your 2026 estimated tax payments and federal tax deposits.
  • Have individual debts of up to $50,000 for streamlined, or up to $100,000 for expanded, if paid within the collection statute.
  • Provide a completed form detailing your assets, income, and monthly expenses.
  • Have monthly expenses aligned with the IRS Local Standard for Tennessee, including specific county-level caps for housing and utilities.

If any of the following is true, you may not be eligible for this program:

  • Have an active bankruptcy case.
  • Have enough equity to pay in full, including assets, or sufficient monthly disposable income.
  • Have defaulted on a previous Fresh Start agreement, or failed to stay current on filings within the last five years.
  • Currently under investigation, or have been flagged for fraudulent returns.
  • Claim you don’t owe the tax without providing legal or factual proof.
  • Fail to pay the $205 application fee, unless you meet the Low-Income Certification guidelines.

That may sound like a lot, and the IRS has no problem dismissing your case if you show up unprepared. That’s where the Tom Bible Law team comes in. We will make sure your claim has everything it needs to succeed. When you have questions, our experienced attorneys can help give you the confidence you need to find financial freedom.

What Is the IRS 10-Year Clock?

The 10-year statute of limitations, known by the IRS as the Collection Statute Expiration Date (CSED), is one of the most powerful tools for taxpayers. It sets a hard deadline on how long the federal government has to legally collect a tax debt.

The 10-year clock does not start on the day you file your taxes or the day they are due. It starts on the assessment date, the day the IRS officially records your tax liability in their books and sends you the first notice of balance due. If you owe taxes for multiple years, each year will have its own unique 10-year expiration date. Once the CSED passes, the IRS’s legal authority to levy your bank account or garnish your wages for the specific debt ends, and the debt is essentially written off.

Certain events can pause this clock, giving the IRS more time to collect the tax debt. Filing for bankruptcy, living outside of the United States, and innocent spouse claims can all pause the clock. OIC and CDP hearing requests can also extend the IRS’s statute of limitations while it makes a determination.

Are You Ready For a Financial Fresh Start?

Bankruptcy does not eliminate all types of tax debt, but it has proven to be a very effective form of tax debt relief for many. For tax debt to be dischargeable in a bankruptcy, the following circumstances must apply:

  • The tax return due date must have been at least 3 years before the date you file for bankruptcy.
  • The tax returns must have been filed at least two years before the date you file for bankruptcy.
  • The tax you owe must have been assessed by the IRS at least 240 days before the date you file for bankruptcy.
  • Your tax returns must not be fraudulent in any way.

If you face significant tax debt, it is important to be proactive. Waiting will only make the situation worse. Our attorneys are here to help you explore your debt relief in a relaxed, professional environment. Whether you face IRS tax debt or state tax debt in Tennessee or Georgia, we are here to stand up for your rights.