Owe The IRS

[Flamingo]

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????

They must have changed how they handle Chapter 13 folks who have payments to the IRS in their Plan. Note we did not have to pay any extra fees, penalties or interest.

[Flamingo]

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.

The key is if you are in BK and owe the IRS for prior years that are being paid through your Plan to the IRS because that puts you in a whole different sector than the average taxpayer who just needs to pay out on what is owed. You cannot have two payments plans with them; you can add on to a payment plan already being paid on but they will not allow you to carry two. It appears now that they may have changed as to those already paying on former taxes in a Chapter 13 and allowing a regular payment plan in addition to the payments from the Chapter 13. But now they are charging feees where before there were no fees. In 2004/2005 we were not allowed to have a payment plan in addition to our Chapter 13 payments - they considered that a payment plan at that time. They told us those in our situation could voluntarily send in monthly payments to pay off the bill. We did as instructed and did not incur any additional fees, penalties or interest probably since we were in BK.

Goes to show you how things can change and the extra costs now involved.

[MajorMike]

Also, in our plan, we only owe $650 or so as a priority debt and the rest is UNSECURED debt (of which they will get about 22% of it from our plan) I don't understand what you mean by payment plan in the BK.

[Flamingo]

Also, in our plan, we only owe $650 or so as a priority debt and the rest is UNSECURED debt (of which they will get about 22% of it from our plan) I don't understand what you mean by payment plan in the BK.

The IRS rep told me over the phone that the IRS considers funds payable to them in your Chapter 13 as a payment plan; therefore, they would not allow us to have another payment plan with them for taxes owed after the Chapter 13 filing. We could voluntarily send them funds on a monthly basis but they would not provide us with an approved IRS plan for repayment.

[CATCHMEIFYOUCAN]

I owed $4000 and was able to set up a payment plan. I downloaded the form from their website and also sent $100 and requested a payment plan of $100. Went smoothly. I had just gotten discharged as well.

Good Luck, Catchmeifyoucan

[Flamingo]

I owed $4000 and was able to set up a payment plan. I downloaded the form from their website and also sent $100 and requested a payment plan of $100. Went smoothly. I had just gotten discharged as well.

Good Luck, Catchmeifyoucan

The OP just filed Chapter 13 and owes a large amount but does not have past taxes payable to the IRS in his Plan. We ran into the same thing a year after filing (owed a smaller amount) but were paying taxes for 2001 in our payment plan of over $2,000. Since the OP does not have taxes being paid to the IRS in his Plan, he should be fine after he contacts them. Unfortunately, they would not extend one to us due to that but it appears they did approve Major Mike for one but who it appears has a smaller tax amount being paid to the IRS in his Chapter 13.

To the OP - did you call that IRS number on the form? Can you update us?

[krielly]

The OP mentioned that he could probably pay this amount in full in May. To keep things simple, I would probably send a partial payment with a notice stating my intention to pay the full amount due in May. It didn't sound like they needed a drawn out payment plan, unless I missed something.......

[Crainial Access]

Greetings,,,,,OP here........will be calling the IRS tomorrow and will update you on their response.......will most likely pay the entire amount by the end of May... early June.

[Crainial Access]

OK folks here's the scoop

Called the IRS number on the Installment Agreement form.....waited 20 min on hold then spoke to someone who gave me the number of the main insolvency unit....called waited at least 35 min till a human answered...explained my situation...she verified my bankruptcy information online somehow and stated she had to enter the bankruptcy details into the IRS system...took an additional 20 minutes...then she gave me the number of an individual to contact in Buffalo NY. More phone tag till we connected...Very nice individual who stated that since I was in chapter 13 they could not set up an "official" payment plan. She did say that if I wanted They (IRS)could file a claim with the trustee to have the 2007 taxes I owe included in my Bankruptcy....I respectfully said no I want to pay outside my plan.....We agreed on a monthly amount $300 paid on the 9th of each month and naturally I can send in more if I want. I have to send an amount $500.00,with my return initially and then send subsequent payments to directly to her in Buffalo, NY. She was adamant about notifying her if I anticipate having any problems making a payment. I'm sure they would notify my trustee and file a claim which would be a bad thing. I'm nervous about being in the IRS system now and wonder what would have happened if I had just sent the installment agreement form in..........wonder if this will trigger an audit

[Flamingo]

No, you did the right thing. Remember I mentioned prevoiusly that we sent in the form via regular mail to request a payment plan and that was at the advice of our attorney when we realized we had a $1,500 tax bill about two years after filing. We received a letter back several weeks later from the IRS advising us that we had to call the BK unit in our area (they provided the number) and they could not approve the payment plan for us because we were in Chapter 13. Like you, upon calling, we were advised we could not obtain an "official" payment plan but we were advised that it was due to us already having a "payment plan" of paying the IRS back taxes for the year 2001 in our Chapter 13. THen it was explained to me that one cannot have two payment plans with the IRS at the same time. So an unofficial one, like yours, was set up.

You did the right thing by complying with what was listed on that form and calling them. Being listed in their BK unit does not make you more likely for an audit than anyone else.

One thing, make sure you get a confirmation or some sort of receipt from them when you pay that amount in full. You don't want them to screw up and take your refund if you get one next year for 2008. Keep records of all amounts paid, dates and who you talked to.

Glad things worked out for you.

[BlessedOne]

I did not read the entire thread but we had the exact situation happen with us. We had our taxes included in our plan and because we seem to owe every year, we will include the subsequent years also. The reason we did not work out a payment plan with the IRS is because the penalties and interest keep accruing, but it stops if you include the taxes in your plan.

[Crainial Access]

yes the agent in Buffalo stated that penalties and interest would apply.....which I expected. I'm starting a new position soon with a substantial salary increase that will not be affected by my confirmed plan at 100%. I will pay the IRS amount due by early June and have adjusted my witholdings so as not to repeat the situation in 2008. Thanks for all your words of wisdom and support, especially Flamingo. As I am only 5 months into a 60 month plan ......I'm sure I will have more questions as things evolve.

[Flamingo]

I did not read the entire thread but we had the exact situation happen with us. We had our taxes included in our plan and because we seem to owe every year, we will include the subsequent years also. The reason we did not work out a payment plan with the IRS is because the penalties and interest keep accruing, but it stops if you include the taxes in your plan.

Note - we did not include the $1,500 in our Plan; we paid it per their instructions outside our Plan via their "unofficial" payment plan, and we were not charged anything as to fees, interest or penalties. We just paid $1,500 over a period of time. In fact, they never even mentioned to us that we could include that in our Plan which was filed two years prior. Interesting as to what is coming out in this thread.