One More Question, modify plan

[klux]

I was wondering if anyone here has modified their plan? We are in a 60 month plan, so there is no room to suspend a payment and add to the end of the plan. Our problem arose because we did not have enough taxes took out of our paychecks last year (we've increased withholding this year) and we owe in to the IRS. I sent a letter to my attorney saying I want to modify my plan and change the amount of my payments to make up the difference over the life of my plan for me to not make payments for 4 times so I can pay these taxes so they trustee doesn't try to dismiss my case(because they can) for owing the IRS. I don't know when she'll ever look at it, it takes forever for her office to get back to me and they are very very very snippy when they do. Do you think she can tell me she won't file the modified plan? And if they file the plan, I know they have to allow for time for creditors to object, any idea how long that is? My employer will keep taking amounts out for the waiting time period, do you know if the trustee would send me a check for that money since that's the time frame I'm trying to modify the plan for? Just a thought.

[HHM]

Well, you are out of luck, you can't modify a plan because you have new debt (which is what the IRS amount due is).

Generally, plan modifications are done if there has been a decrease in income, or an increase in "living" expenses. The fact that you owe the IRS is neither of those. I'd suggest you call the IRS and work out a payment plan.

[klux]

The IRS said if it's not paid, since I"m currently in a bkptcy that they will file another proof of claim for the amount. Then the trustee will file a motion to dismiss. I can't come up with the money unless I can skip a couple payments..........my budget is tight, I seriously give them all my disposable income....I don't just have $1500 in savings.

[Flamingo]

Taxes (and other debt) owed after a Chapter 13 filing is your responsibility. We too owed taxes for 3 years straight after we filed in 4/02. Small amounts for two years but for the year 2002 we did not have enough taken out and not enough to itemize as we did in the past and had a $1500 tax bill. Just what one needs to find out less than one year after filing. Since we had our 2001 taxes in our Chapter 13 plan, the IRS would not allow a second payment plan with them. What we had to do was call their bankruptcy section and work out sending them something per month until the $1500 was paid off. We sent them $50 per month after talking to our attorney about the situation. It was hard but we did it.

If you have no taxes included in your Chapter 13 filing with the IRS for previous years, they should work out a payment plan for you for the amount you owe. Your plan will not be modified for that debt.

[MajorMike]

Why are you saying that your BK will be dismissed? We are currently getting audited for the 2005 tax year and I know we'll owe. What happens then? They won't allow us to do a payment plan if we already owe the IRS in our BK? ( we owe from a 2003 tax year )
Are you honestly saying our BK will get dismissed???? Jesus....what the hell are we going to do? I know it'll be about 4-6K that we owe from that year because they won't accept our business deductions without records from the car we drove that year...among other things.
Someone please verify if that is correct or not as this is turning into a nightmare! Thanks
I have no problem being in a payment plan but what if it's past the date to file a claim? How can the IRS add to the claim if it's past the deadline? If they CAN add to it, why are you saying NO? This is not for the current year but for a year PRIOR to filing.

[lrprn]

I have no problem being in a payment plan but what if it's past the date to file a claim? How can the IRS add to the claim if it's past the deadline? ... This is not for the current year but for a year PRIOR to filing.

MM, what did you say you owed the IRS for your 2005 taxes when you filed? (Is it safe to assume that if you are being audited by the IRS now, you did file your taxes for 2005 on time in 2006?)

[klux]

Flamingo, my trustee told me that if they are not paid in full they will file a motion to dismiss. My attorney seemed to think I"d be able to modify my plan, because I'm not asking to get the taxes added into my plan, the modification would just be because I have to make up an amount for misisng a couple payments.

[krielly]

We had to miss 4 payments at the beginning of our plan. I was lucky that the trustee agreed to let us send $100/mo for each of those 4 mos as a good faith payment, and then pay an extra $120/mo on top of our regular payment until we got caught back up. We had to do that for almost 2 years, but as of a few months ago, we're finally back on track. He actually let us do this without modifying the plan.
Thank god!!!!!!!!!!!!!!
Good luck to you!

[MajorMike]

MM, what did you say you owed the IRS for your 2005 taxes when you filed? (Is it safe to assume that if you are being audited by the IRS now, you did file your taxes for 2005 on time in 2006?)

I just got audited for the 2005 a few weeks ago. I haven't found out what it is I owe yet. Yes, we filed on time every single year, but they are auditing my business deductions from 2005. If I owe, what will happen?

[Flamingo]

Flamingo, my trustee told me that if they are not paid in full they will file a motion to dismiss. My attorney seemed to think I"d be able to modify my plan, because I'm not asking to get the taxes added into my plan, the modification would just be because I have to make up an amount for misisng a couple payments.

Do you already have taxes being paid to the IRS in your plan? If not, there is no reason the IRS should not work with you as to a payment plan to them spread out over several years to accomodate your Chapter 13. If you currently have taxes in your plan being paid to them (back taxes for a previous year), the IRS will not allow another payment plan since you are already paying them taxes through your Chapter 13 plan. Their bankruptcy section did, however, advise us that we could send in a monthly payment on the taxes we owed for 2002 (we had 2001 taxes in our plan) since we could not pay them in full and that is what we did. It's been paid off since the fall of 2006. I discussed the situation with our attorney who advised us to send in the payments as instructed and we advised the IRS we would send them $50 a month until paid. This was offerred to us by the IRS due to our Chapter 13. There may be other reasons as to your situation why that is not extended to you IF you have taxes being currently paid in your plan. If not, I would seriously find out why they will not extend a payment plan to you.

[lrprn]

I just got audited for the 2005 a few weeks ago. I haven't found out what it is I owe yet. Yes, we filed on time every single year, but they are auditing my business deductions from 2005. If I owe, what will happen?

If the audit shows you owe the IRS more money, then you will owe the money.

What I don't know is since you say the audit will show you owe thousands more on your 2005 taxes, whether the extra owed will be added to whatever you already owed the IRS when you filed or if it will be considered new debt not a part of your Ch 13 and you'll have to start paying on it now yourself like any other post-filing debt. You need to ask your lawyer and a tax accountant about this one.

[MajorMike]

Thanks guys.
This is what is confusing. It is a debt incurred before filing so I dont see why they can't ammend the petition and add it to what we already are paying. We have a $400 priority from 2004 taxes to pay and $2600 unsecured from 2003 taxes. The reason it's so messed up each year is because I went into 401K for 2003 and forgot about the 10% penalty I had to pay ( it was for downpayment on house ) and then in 2004, I forgot about a side job that generated a w-2 and I had to pay taxes on that. I had the two debts actually added together. It wasnt two payment plans but they added them together and we were making ONE payment. It started out as over $8,000 but our refunds were sucked up in later years as well as $100/mo we were paying to knock balance down.

[klux]

We had to miss 4 payments at the beginning of our plan. I was lucky that the trustee agreed to let us send $100/mo for each of those 4 mos as a good faith payment, and then pay an extra $120/mo on top of our regular payment until we got caught back up. We had to do that for almost 2 years, but as of a few months ago, we're finally back on track. He actually let us do this without modifying the plan.
Thank god!!!!!!!!!!!!!!
Good luck to you!

I've tried calling my trustee and I only get to talk to her assitant, who tells me to contact my attorney. I"ll let everyone know the outcome once I find something out.

[krielly]

good luck. Keep us posted for sure! I have my fingers crossed for you!