Income taxes and Ch 13

[justbaby]

I filed in July10 Chapter 13..I had to have my tax returns amended due to an erroneous head of household filing. All of that has been fixed but I have to pay back what I was overpaid. All of it was claimed in my Ch 13. I know that I still file my taxes (correctly) of course but will I still get a refund even if I owe?

[HHM]

If you are in an active chapter 13, the IRS should not keep future refunds. The automatic stay prevents the IRS from applying refunds (it is a collection effort after all), and presumably the IRS will be paid in the chapter 13 plan. The issue with amending tax returns and chapter 13 is making sure the IRS DOES get paid. This often means the debtor needs to file an initial proof of claim for the IRS (the IRS will later submit its own), but this way you make sure the Proof of claim is timely filed and accounted for in your plan.

Normally, your chapter 13 plan will cover the issues of tax refunds.

[justbaby]

They sent in a proof of claim because I had to "walk" in the amended taxes. They were one of the first proof of claims rec'd back. So does that mean I could "possibly" get a refund this year?

[HHM]

You should unless your plan specifically states how the refund is to be treated.

[justbaby]

Great! Where can I find that information? I looked on my confirmation letter but nothing is said about income taxes that I can make out..everything is in legal terms.

Does this have anything to do with income taxes:
Pursuant to 11 U.S.C. § 522(f)(1)(A) and/or (B), the court hereby finds that the security interests to be avoided as set forth
in the confirmed plan or by separate order impair an exemption to which the debtor would otherwise be entitled under 11
U.S.C. § 522(b) and South Carolina Code § 15−41−30 and are, therefore, avoided.

[tammygirl1]

My situation may have been a little different but we filed in August owing IRS and state. We then realized we had to file a previous year's taxes and were getting a refund for both. Both IRS and state filed POC so we thought we might actually get the refund in hand..but that wasn't the case. The IRS amended their claim and reduced the amount owed (although we still pay same amount into plan since we are not at 100%) but state kept the refund and sent us a letter stating they were reducing amount owed but never updated the POC. I am hoping we eventually get that money since trustee will be paying what POC says and will essentially be an overpayment and returned to us.

[justbaby]

Ouch! I hope that's not the case for me. My plan is 100%, maybe that was the issue? I have a local IRS rep that has told me that according to her system (notes), its set that I will get my refund. So I hope she's right...