Will owe taxes for 2016 need guidance please

[fernbuz]

I will be filing chapter 7 in late february/ early march. i do not owe any back taxes. but i am expecting to owe 1600 for federal and 1700 for state for 2016. i have completed my return but have not filed yet. what are my options for this future expected debt? will i be able to go on installment plans with the IRS and state (georgia)? i have room on a credit card to pay this with but i believe that would cause a problem and be a nondismissable debt in my case. please any info will be helpful. thank you.

[leonel9]

Generally if you make a luxury purchase of $600 or more within 90 days of filing your creditor may object to discharge of that debt.

While no one considers the IRS and state tax authority a luxury purchase, there can be an argument made that you had no intention of repaying the $3,300 you charged, and given the short about of time prior to filing (2 weeks or so), you should have known you were insolvent (and possibly in the process of filing bankruptcy).

If this were a $400 purchase it may be a different story. For $3,300 within weeks of filing, it may be worth it for a creditor to pay an attorney to object to this. If you do make the charges and get sued, you'd be looking at additional expenses in the form of attorney costs.

I would not take this action, and instead pursue a payment plan. Also correct whatever caused you to have such a large amount owed (e.g. decrease the number of your exemptions), if possible, to prevent this from happening again.

[justbroke]

There is also caselaw that if you pay (otherwise) non-dischargeable taxes with a credit card, those charges on that credit card are also non-dischargeable. Whether a creditor will go through the trouble of having a determination on the non-dischargeability status is the real question.

I agree with leonel that charging non-dischargeable taxes to a credit card within weeks of filing, is a non-starter.