Question IRS Proof Of Claim Wrong-Due to Fraud Tax Return

[azphoenix]

Hello all,

My Chapter 13 plan was confirmed almost 2 weeks ago. I still have some issue's that my attorney did not want to address. His attitude is, just wait and see. The major issue is the IRS Tax Proof of claim is not correct. I actually owe more. I owe back taxes for 2018 (ex-husband was awarded to pay 2018 in divorce decree, he was paying a monthly instalment plan with the IRS up until I filed Chapter 13 in April. The IRS stopped taking the payments out of his account). I know I have to pay those through my plan in full. I will have to deal with the EX to be reimbursed somehow. The real issue is, I owe taxes for 2020 and 2021. February of this year, someone filed a fraud tax return for 2021, thinking they would get money back. I'm sure it was a surprise to the crooks, that I owed money to the IRS. The IRS not knowing that it was a fraud tax return, applied a credit to my 2020 taxes and left the balance with very little owed. And zero amount for 2021 owed. When in fact I owe 2020 and 2021 taxes. I have tried to address this with my attorney for month since the start of the BK and he just keeps saying it's up to the IRS to figure it out. Now my plan is confirmed with the wrong amount and I owe more than the IRS Proof of Claim. I spoke with the Special Claims Agent who filled in the Proof of Claim. He was very nice and said have my attorney send him my returns and amounts and he can amend the Proof of Claim with just a "record" of the amount and when the IRS catches up with the accounting he will be notified and he can then put the correct assessment. The Special Claims agent did let me know, that I would have to do an amendment to my plan. I want to discuss this with my attorney, however my attorney yells at me if I ask him anything or question him and say's I don't trust him. He was even angry at me for going on Pacer to look at Documents because I had nothing passed on from my attorney and kept getting possible dismissals to my case in the mail, even though I had sent in documents to my attorney month ago. So, my question is, do I just wait until the IRS figures out the correct accounting? Or should I be proactive and tell my attorney this needs to be done sending in the correct amount to the Proof of Claim Agent? I'm scared that now my payment plan will be more than I will be able to afford. I have repeatedly told my attorney this, and he just doesn't seem to care. And out of curiosity is it normal for someone in Chapter 13 to go on to Pacer and look at documents if the Attorney is not letting you know anything? My attorney was very upset I went on there. Said I shouldn't even know about it and also to stay off the forums. I would love to change attorneys, but at this point I think I’m stuck with him. Anyone have any advice before I email my attorney on the IRS issue? Thank you so much for everyone on here.

FYI-I posted this somewhere else on this site, but not sure what happened to it? Sorry

[justbroke]

Yes. It's up to the IRS to figure out their claim. You may try to call the IRS Insolvency Unit and see if they can take a look. For what its worth, government entities such as the IRS have 180 days to file (or update) their claim(s).

[azphoenix]

Thank you justbroke. When I spoke with the Fraud Department, I was told it could take 180 to 365 for the IRS to catch up to the accounting. IRS didnt' even get to my paper filing until August 25th. I filed on April 7th. What happens when the 180 day's pass and their claim is not updated? Will I then owe the 2020 and 2021 taxes after my BK plan is finished? I don't want to be in any debt after the 60 months. Should I just take my attorney's advise and just leave it alone and not have the IRS Claim Specialist update the "record" of the Claim? Thank you again for any feed back.

[justbroke]

The IRS cam update the claim. You would just not object to it being "late." (The 180 days is only for them to file. It would likely not affect an update to the claim.)

I would, however, make sure that you keep on top of this and check with IRS Insolvency and/or their claim. This sounds like priority debt so it should be paid in the bankruptcy.

[azphoenix]

justbroke, Yes the 2020 and 2021 taxes will be a priority debt and need to be paid through the plan, and my plan was confirmed on OCT 21 without this information This is why , I was wondering if my attorney should let the Claims Specialist know the approximate amount that is not included the the Proof of Claim , and they can update there record. Or just wait possibly almost another Year before the IRS gets to correcting the accounting on my account. Makes me stressed not knowing how the amount will effect my plan payment or if I will not have enough to cover the additional amounts due. The last thing I want is to be a year into the plan and then it get dismissed. Thank you again for your response.

[justbroke]

A Chapter 13 debtor can submit a claim on behalf of a creditor. Since the IRS already filed a claim, I don't know what you should do. I would talk to the Insolvency Department at the IRS. Their entire purpose is to manage the claims in the bankruptcy.

[azphoenix]

justbroke Thank you. I will look into the Insolvency Department. I did speak with the gentleman who's name is on the Proof of Claim from the IRS. He was very nice and just said have my attorney send over the amounts owed with tax returns. He would update the Claim as "recorded" and then the amount would be updated when the IRS updates the accounting. I'm afraid to go to my attorney with this information as he just wanted to nothing about it and said it's the IRS problem. So options, leave it alone like my attorney wants to do and wait almost a year for the correct amount. Or tell my attorney that we need to update the information with the Claims specialist. I'm trying to get advise because I'm not comfortable going to my attorney unless I have to.

[justbroke]

Oh, that person was probably in the Insolvency department. That department deals with all bankruptcies. Go back to your attorney and tell them exactly what the IRS said.