Owe The IRS

[Crainial Access]

My chapter 13 plan was confirmed in February and I had a feeling I was going to have to pay the IRS based on a decreased mortgage interest and property tax deductions that led us to chapter 13.

Looks like I owe $2125.00 which was much higher than expected. I am going to file on time and send in a partial payment. Does anyone know if the IRS will set up a temporary payment plan on the balence? I guess i'll get hit with penalties and interest. I should be able to pay the balence due in May.

[Flamingo]

If you do not have former taxes in your Chapter 13 that are to be paid back to the IRS for former years, you will be able to set up a payment plan with the IRS for these new taxes owed. If you do have former taxes in your Chapter 13, you will not be able to set up another payment plan.

[oldrocker]

If its only income tax and you have no other tax debt then setting up an installment plan with the IRS is very easy. I've done it with a form my accoutant gave me but I think I saw a link on the IRS website to set up an installment plan online. Basically you just offer them a monthly payment figure you think you can live with, unless its rediculasly small they will aprove it with no problem.

[MajorMike]

If you do not have former taxes in your Chapter 13 that are to be paid back to the IRS for former years, you will be able to set up a payment plan with the IRS for these new taxes owed. If you do have former taxes in your Chapter 13, you will not be able to set up another payment plan.

Not true, we owe taxes to the IRS in our BK and we owe now for a bill we just got. The IRS has set us up on a payment plan outside of our BK for $75/mo. where is that info you found that they won't do this?

[MajorMike]

http://taxes.about.com/gi/dynamic/offsite.htm?zi=1/XJ&sdn=taxes&cdn=money&tm=48&gps=358_567_1004_583&f=10&su=p504.1.336.ip_&tt=7&bt=1&bts=1&zu=http%3A//www.irs.gov/individuals/article/0%2C%2Cid%3D149373%2C00.html

[Flamingo]

Not true, we owe taxes to the IRS in our BK and we owe now for a bill we just got. The IRS has set us up on a payment plan outside of our BK for $75/mo. where is that info you found that they won't do this?

Mike - I am talking about the payment plan that is set up through the IRS as was being discussed. If you remember my past postings in another thread in which all this was discussed, I ran into the same thing you did in 2004. I believe you were the OP in that thread and I answered you about my situation and that the BK section will work with you. The IRS, since I included taxes for the year we filed in our Chapter 13, would not permit us to do another "payment plan" along with the CHapter 13; however, without paperwork through the IRS we were verbally allowed over the phone to work out an agreement to send them a specific amount each month. We did not have any written paperwork from them as to this agreement. When you are in the BK section of the IRS during a Chapter 13 that means you have payments for taxes being made to the IRS and things are handled much differently than for someone who has not filed and needs a payment plan. If the OP is not paying taxes to the IRS through his 13 for a previous year, he can easily get a regular payment plan. If not, he will have to work through the BK section of the IRS to send in what he can. He did not indicate if he had included taxes for previous years in his plan and I answered him accordingly.

[Flamingo]

To Mike - question for you...does the IRS know yet that you are in BK or did you just submit the form to obtain a payment plan? We originally just submitted the payment plan form and the IRS contacted us a few months later (we thought all was fine and would be approved) that since we were in Chapter 13, they would not allow us to pay on another plan and to please contact their bankruptcy section, to which they provided the local number for our area. First they asked us to try to pay the bill in full or utilize a credit card (right!) and then they told us that they cannot prevent us from sending in money for the amount due on a monthly basis. Then we had to do the verbal agreement over the phone. I kept tremendous records of names, dates and times on the process cause I was terrified someone would come after us. I don't know what process you are in at the moment since you said your bill is recent and it takes a few months to get a regular payment plan approved and in place.

[Flamingo]

http://taxes.about.com/gi/dynamic/of...9373%2C00.html

Please look on page two of Form 9465 (Payment Plan application) -"Bankruptcy or offer-in-compromise. If you are in
bankruptcy or we have accepted your offer-in-compromise,
do not file this form. Instead, call 1-800-829-1040 to get the
number of your local IRS Insolvency function for bankruptcy
or Technical Support function for offer-in-compromise."

If this form is still submitted or prepared and submitted online, the IRS will eventually get back to you in writing, as they did to us, advising they cannot approve the plan since taxes are being paid through a previous payment plan (Chapter 13) and will give you contact information. You still will be able to send in monthly payments - keep detailed records when you contact them and work things out. Keep detailed records of the conversation and names and detailed records of your payments.

[Crainial Access]

Thanks for all your info....just to clarify... no back IRS taxes in my chapter 13...... the amount owed is for 2007.

[Flamingo]

When you submit your partial payment, you can enclose that form with your filing indicating what you would like to pay per month on the balance owing. They will get back to you in writing. You'll probably hear from them in June.

[Crainial Access]

Now I am confused....just downloaded Form 9465 "Installment Agreement Request" On the very top of the form it directs you to instructions on page 2 if you are in bankruptcy. Says to call my local IRS insolvency unit for an offer in compromise.......I don't want to create more problems...with my plan.........Ugh!

[Flamingo]

Now I am confused....just downloaded Form 9465 "Installment Agreement Request" On the very top of the form it directs you to instructions on page 2 if you are in bankruptcy. Says to call my local IRS insolvency unit for an offer in compromise.......I don't want to create more problems...with my plan.........Ugh!

I posted that quote previously....what they are probably going to ask is if you are in Chapter 13 and have back taxes in your Plan; if not, you should have no problem with a regular payment plan. It's the back taxes that create the problem. You won't create any problems with your Plan - your Plan has already been filed.

[MajorMike]

Hi Flamingo,
No, we told them we were and they said they knew it already as well. The bill was from 2005 taxes and we got it about 3 months ago. They just took the fee and set us up. Maybe it's because the amount in BK is not a priority????

To Mike - question for you...does the IRS know yet that you are in BK or did you just submit the form to obtain a payment plan? We originally just submitted the payment plan form and the IRS contacted us a few months later (we thought all was fine and would be approved) that since we were in Chapter 13, they would not allow us to pay on another plan and to please contact their bankruptcy section, to which they provided the local number for our area. First they asked us to try to pay the bill in full or utilize a credit card (right!) and then they told us that they cannot prevent us from sending in money for the amount due on a monthly basis. Then we had to do the verbal agreement over the phone. I kept tremendous records of names, dates and times on the process cause I was terrified someone would come after us. I don't know what process you are in at the moment since you said your bill is recent and it takes a few months to get a regular payment plan approved and in place.

[MajorMike]

We didn't go through the form online. I filled it out from what they sent me.

[CindyLou]

The IRS is ALWAYS willing to set up a payment plan...even if you already have one...they will also go longer than the stated 36 months. You just have to call them and ask. They just want their money. The thing is you just have to fall within the guidelines to use the basic forms or the online service.