Ch 13- back taxes????????????????

[feemama]

I will be filing without my husband. We were audited by the state for 2006 2007 2008, just got the results today. They say we owe $7,700 throughout those 3 years....yikes... when I include them in th bk how will that affect the bk... Will they be held at bay for the 3 years I am in the bk. they have already added $900 for 2006 and same for 2007. I know you can bk tax debt if it is over 3 years old, but at the end of this time will they just go after my husband?????????????? any advise will be very welcomed. Met with attorney yesterday for the first time, but didn't have the results yet. He did say our income will result in 0% unsecured and the monthly minimal amount will go to attorney and trustee.

[StartingOver08]

Now you can add in these tax debts and they are a priority creditor. I would contact your attorney right away so this debt can be paid in the BK.

[BigJohn]

You might want to audit what the State says you owe. You might find the amount owed is considerably less.

[spearmint]

You might want to audit what the State says you owe. You might find the amount owed is considerably less.

John - How did you end up with a 4-year plan? I thought the choice was three or five.

[optimistic1]

Spearmint, if your budget can warrant a 36 month plan, and if it cannot, then your plan length can be from 36 to as much as 60, only if you are under the median income.

Stretching the plan out beyond 36 months allows you to pay on all the claims if you cannot afford the monthly payment based on 36 months.

[HHM]

You will want to amend your chapter 13 plan to PAY these taxes through the chapter 13. Since they are audited taxes and are not within the 3 year rule, the tax is non-dischargeable and priority.

[krielly]

Yes, definitely include them. Principal and interest are priority, but penalties are treated as unsecureds, and are dischargeable, once you pay your plan's percentage. Also, further penalties cannot accrue when you are in BK.

Good luck!

[feemama]

You will want to amend your chapter 13 plan to PAY these taxes through the chapter 13. Since they are audited taxes and are not within the 3 year rule, the tax is non-dischargeable and priority.

They are from 06 07 08 will that make a difference when it comes to dischargeing

[biotechsolution]

Yes, definitely include them. Principal and interest are priority, but penalties are treated as unsecureds, and are dischargeable, once you pay your plan's percentage. Also, further penalties cannot accrue when you are in BK.

Good luck!

But penalties may only be considered dischargabe if the taxes are considered dischargable. That's usually how it works. But say the taxes were from 2002 and you never filed a return untill right before your filing. The taxes won't be dischargable but the penalties would be because they are over 3 years old.

[HHM]

They are from 06 07 08 will that make a difference when it comes to dischargeing

Nope, none of those years are eligible for discharge.

[krielly]

We filed our 13 in 2005. We had tax liability for that year (both state and federal) which we included in our plan.

Claims were filed by the IRS as follows: Principal & Interest was filed as secured, penalties were filed as unsecured. While the P & I were priority secured, and paid in full, the penalties were paid at the same percentage as the unsecured.

K

[biotechsolution]

We filed our 13 in 2005. We had tax liability for that year (both state and federal) which we included in our plan.

Claims were filed by the IRS as follows: Principal & Interest was filed as secured, penalties were filed as unsecured. While the P & I were priority secured, and paid in full, the penalties were paid at the same percentage as the unsecured.

K

DId you file before the bankruptcy laws changed??

Prior to the new bk laws, Oct 2005, when you filed a chapter 13 you received essentially a 'super' discharge of any taxes. Very different than a Chapter 7 at the time. Since )ct 2005 the 'super' discharge is gone.

[HARLEEBB]

Hi,

I had the same thing happen for years 2003 and 2004 for the State. The amount they said I owed came to almost 7000.00. I actually called the number that was provided on the letter and spoke to the State Rep. I went and had the taxes for those 2 years done at HR Block. I wound up only owing a total of 120.00 for both years. I sent the taxes to the address that was on the letter from the state. There is a separate "tax" department for people that are in chapter 13. You don't send the returns to the normal place. After I mailed the taxes they still didn't remove the claim so I called them again. They had tagged a "penaltly" on me which only amounted to around 100.00 and I paid that as well. That took care of the state taxes. The 7000.00 only wound up being around 220.00. The state has since withdrawn the claim.
The State Rep told me that they could just make the claim for the money I owed but I didn't want to deal with Taxes on my BK13. The man I spoke to was "beyond" nice to me.
This is just how I decided to deal with the taxes and it worked out to be a lot less than what they said I owed.

[helpless]

I don't know about state taxes, but my husband filed CH13 separately and included back taxes. Taxes were paid and penalty and interested to the day we filed we paid out at the 23%, just like the other creditors. He was discharged in November and last month I got a letter from the IRS for the other % not paid in penalties and interested plus more penalties and interested. When I asked why they didn't pursue me during the last three years and continued to give us our refunds, they didn't have an answer. First they tried to say that I was included in the bankruptcy and they couldn't contact me, but when I pointed out that I wasn't, she said that I would have to file a form to reduce the penalties, but I would first have to pay the full amount and then if they approved it, they would send me back a refund. Got to love the IRS. They did give me 6 months to pay it, so I am making payments as we speak.

[krielly]

DId you file before the bankruptcy laws changed??

Prior to the new bk laws, Oct 2005, when you filed a chapter 13 you received essentially a 'super' discharge of any taxes. Very different than a Chapter 7 at the time. Since )ct 2005 the 'super' discharge is gone.

Yes, we filed prior to the law change, but I don't believe we were under any "super discharge" as you refer to it. Our taxes and interest remember, were not dischargeable. Those were paid 100% as priority debt. Only our penalties were treated as unsecured, and are being paid at 28% like the rest of our unsecured......