Post confirmation tax bill

[Alex46]

I was hit with a tax bill this year because I hadn't adjusted my deductions last year until later in the year (to ensure not owing money)...Problem is, with my Chapter 13 (one year in) I can't afford the bill. My plan is very tight to where recently I had to forego buying my seizure medications until later next month when I can afford them....so, a $3k tax bill isn't funds that I have readily available.

I asked my attorney if we can amend my plan to include the tax debt, and he said the only way we could do that is to dismiss the active chapter 13 and refile. He told me to make an offer in compromise. I called the IRS and they told me I can't be on a payment plan, or submit an offer in compromise because of my bankruptcy (I already have 2k in tax debt included in the existing plan).

After doing a search online, I saw some sites (including the IRS) that say Section 1305 allows me to ask the IRS to file a claim so that I can then amend my plan and include the new tax debt. But, my attorney made no mention of this. Has anyone here heard of this, or done it?

[spidge]

I had the same problem. Call the IRS and ask for the bankruptcy department. I was given an address and phone number to a case handler for payments and direct contact while in my ch13. She told me to simply mail in a payment whenever and for however much you can. There was no commitment or agreement. I could only send a small amount here and there, but I did over do it on withholdings. The result was that the refunds for the next two years satisfied my tax debt and after that the trustee took the refunds, so adjust carefully.

[despritfreya]

Talk to your attny. The IRS can, but is not required to, file a 1305 claim and your plan can be amended to provide for payment - assuming the amendment is feasible. After you and your attny look at the feasibility issue, if appropriate, your attny can contact the bk unit of the IRS and request the claim be filed.

Des.

[Alex46]

I had the same problem. Call the IRS and ask for the bankruptcy department. I was given an address and phone number to a case handler for payments and direct contact while in my ch13. She told me to simply mail in a payment whenever and for however much you can. There was no commitment or agreement. I could only send a small amount here and there, but I did over do it on withholdings. The result was that the refunds for the next two years satisfied my tax debt and after that the trustee took the refunds, so adjust carefully.

Thanks! My attorney told me that basically the IRS won't try to collect when an an individual is in bankruptcy, and especially not for such a small amount. Amending isn't feasible, which is why I panicked and worried about what would happen. I did adjust my withholdings, so that at least going forward, this won't happen again. Thanks again for your insight!

[spidge]

Thanks! My attorney told me that basically the IRS won't try to collect when an an individual is in bankruptcy, and especially not for such a small amount. Amending isn't feasible, which is why I panicked and worried about what would happen. I did adjust my withholdings, so that at least going forward, this won't happen again. Thanks again for your insight!

They wont try to collect but the balance will sit and grow. If you are not sure what extra you could apply toward it adjust your withholdings so the IRS will take your refunds to settle it. After five years of dedication to a plan you don't want to have a tax bill waiting for you. Also, you want to be prepared to finish cleanly and stay in a position to handle new challenges that may come your way.

Just my suggestions. Trash in trash out.

[Alex46]

They wont try to collect but the balance will sit and grow. If you are not sure what extra you could apply toward it adjust your withholdings so the IRS will take your refunds to settle it. After five years of dedication to a plan you don't want to have a tax bill waiting for you. Also, you want to be prepared to finish cleanly and stay in a position to handle new challenges that may come your way.

Just my suggestions. Trash in trash out.

Makes perfect sense, and I definitely don't want it to grow. I'm actually negotiating with the management company of my current residence because of negligence to maintain the sewer lines, and I've talked with my attorney that if I can get them to settle financially, to apply the funds towards the taxes first, then any extra to the Trustee.

Plus, I also adjusted my withdholdings to nothing to ensure no high tax bill again. I definitely want to be prepared and to get through the plan on a positive note!