Oh No, Additional Tax Debt

[minan]

Our plan includes estimated taxes from the first 6 months in 2010 from our sole prorprietorship since we are required to list all debt incurred, but not yet paid, the date of filing. We are ok with this since our reason for filing was back taxes. We understand that this is priority debt and cannot be discharged. No problem as we just want to pay this debt and get on with our life.

Well, we got our all 2010 1099s and W-2s, and did our 2010 returns. It appears we will owe about $1000.00 more than what is included in the plan. We are reviewing all our bank statements to see if we missed any business related expenses, however we're in a complete panic. Confirmation hearing is in May.

We dread the thought of having to amend our plan for a couple of reasons: 1) we're afraid our payment will go up dramatically, 2) we're so tired of waiting for confirmation and don't want to give the Trustee any reason to postpone. It will have been 10 mos in May since we filed.

Not all our unsecured creditors filed claims. The IRS did file for the '08/'09 balance, however not the 2010 balance since we have not filed 2010 tax return yet. We expect they will file an updated claim to include the 2010 amount.

What are our options? Any advice would be great? We are in a panic.

[RunningMan]

I don't think you need to amend your plan if you owe a creditor a different amount than you first estimated. The IRS should file a claim for the correct amount. However, I am not sure how it works with claiming taxes that are not due until April, after your filing date.

[minan]

I don't think you need to amend your plan if you owe a creditor a different amount than you first estimated. The IRS should file a claim for the correct amount. However, I am not sure how it works with claiming taxes that are not due until April, after your filing date.

That's what we're hoping. Keeping our fingers crossed. We're going to file via taxact.com our 2010 return this coming week so we can get it over with. We are hoping the IRS doesn't wait too long to file an updated claim as our confirmation hearing is in May. We're hoping it doesn't take them months to file an updated claim, however this is not likely since they were the 1st to file a claim when we filed.