Owe taxes this year.

[jersin000]

I am 10 months in to a Chapter 13 plan. I owe taxes this year because I let my daughters mom claim her as a dependant. I did not adjust my witholdings to reflect this, and unfortunately, I have to pay $900 to Federal and $300 to state. Will I be able to set up a payment plan with the IRS or will this get me into trouble with the trustee? My lawyer said something about a Section 1305 filed by the IRS, but if they dont, I have to pay it on my own. I just don't want the trustee to look at it as "new debt" and move to dismiss.

[Flamingo]

Debt acquired after your file, including IRS or state taxes due, is your own responsibility. The main thing here is, are you paying back any taxes to the IRS in your current plan? If not, you will be able to set up a payment plan with the IRS. If you are paying back federal taxes via your Chapter 13 for past years, the IRS will not allow you a payment plan because they consider your Chapter 13 as a payment plan and you cannot have more than one payment plan with the IRS (been through it all).

So if you don't have federal taxes listed in your Chapter 13 plan, contact the IRS for a payment plan to pay back an affordable sum each month to them. If you are paying taxes in your plan, please repost on here and i will describe to you what we went through as to the IRS. Your state taxes are another story and you may have to pay them in full unless your state allows payment plans. Call your Division of Revenue and tell them you are in active Chapter 13 and see if there are any payment plan options.

[jersin000]

Nope! No federal taxes in my plan. Thanks for the info. I was just worried the trustee would have a fit when he saw I owed that much.

[13inIN]

Due to some bonuses I received in early '09 it looks as if I'm upside down this year as well by about $2000. My plan calls for all bonuses to be forwarded to the plan and early '09 was bonus-heavy.

I've left a message tonight for my lawyer, but what do you guys think? Any shot of seeing some sort of remedy thru the trustee and/or plan? I don't have $2000 laying around for the man.

[muzzey58]

I'm in an open 13. My husband owed federal taxes and the back taxes were placed on our plan in 2006. We filed in 2006. Every year, it seems, that we owe the IRS money. We try to pay enough into our federal taxes. We've adjusted our allowances, but still owe money every year. Every year since 2006, the IRS put a claim on case. The back taxes have been paid off. We are facing the same dilemma with local taxes. We moved from one town in 2007. We filed for our local city tax. All our new town wanted was proof that we were in an open 13. We've had no problem with our new residency town. Today, we received a letter from the former residency town to verify our move and our W-2 and filing information. This town's taxes are handled by a large regional tax agency who is very unorganized. My trustee sent this agency a letter stating we had moved. I don't know what other proof they need than from our Trustee. So, I had to call my attorney this morning and tell her of the problem. She said that this tax agency was listed on our plan and should have known to contact her before contacting us. In short, problems will come and go while you're in bankruptcy. You don't have the resources you did before the bankruptcy. This is why you have an attorney. I would contact them asap. Let them know your problem. They are there to give legal advise and support you during this process. My case is about less than a year to be discharged. We're paying nearly $1300 a month to the bankruptcy court to fund our case. We don't own a home and should have been able to file a chapter 7. Because of the changes in the bankruptcy code in 2005, we were forced to file a chapter 13 because of our income. My husband lost his home in 2005 to foreclosure because of a lengthy unemployment in 2002-2003. He didn't receive unemployment and lived off a 401K for a year. I know this process is hard, but it has been valuable to us also. We have learned to live on less and within our means. We don't have any credit but our car loan. We pay our rent on time and utilities on time. We've seen a improvement from a low 400 FICO score to nearly 650 in less in 3 years. The battles come and go but in the end it will be worth it. I wish you all the best. Good luck.