IRS Tax Balance; 401K Step Loan Increase; Braces;Witholdings

[wannaknowleo]

Please help!! Any advice would be much appreciated.

My plan was confirmed 14 months ago and at the time I submitted copies of my last years tax returns for the IRS. Well, late last summer I received an amended tax form and bill from the IRS for an error on my part. I have yet to discuss this with my attorney because I don't know how this will impact my confirmed plan. Any thoughts on this? Should I pay if off myself? Is it possible to include the back taxes in my plan after the plan is already confirmed? I'm trying to find the least way to avoid a red flag and stay under the radar.

Also, my state tax witholdings are low and has created a tax bill for the last two years. At the time of confirmation my IRS refund was allowed to pay off that balance. However, every year I will run into the same issue unless I ask for permission to change my witholdings so that a balance isn't created. Which brings me to the 401K step increase, I have several throughout the plan, but can I ask my attorney to have the step increases waived so that I can increase my tax witholdings? And pay for much needed braces for my child? Again, my goal is to stay under the radar and not bring attention to my case, any advice would be awesome.

[justbroke]

Yes, you should have already started a conversation with your attorney as soon as you knew (or believed) that you would be in some tax trouble. A condition of a Chapter 13 Plan of Reorganization, is to stay current on taxes. Please contact your attorney and let him/her know what the situation is.

I can't promise you that the affects of the tax situation are not impacting the feasibility of your plan. However, if you let this keep going, it will cause your Chapter 13 to be dismissed or make it impossible to complete, at best.

Looks like you'll be on the radar. You'd, again, need to ask your attorney about the braces since the Trustee "might" consider it a luxury (cosmetic). However, not all Trustees are that tough and understand that life happens. Just be honest and open with your attorney.

[wannaknowleo]

Thanks for the reply justbroke. It seems that the easier route for me may mean that I just pay the IRS and avoid bringing up the issue with the UST and avoid a possible dismissal or bring unneccessary attention to my case. I could pay the bill today, but I justed wanted to keep those funds for the braces if it were possible to include the IRS bill in my current plan. I do have room to pay the tax bill within my plan and its not a 100% payback plan. Family would pay for the braces for my son, but I don't think they should, as a parent I feel its my issue to resolve. I will contact my attorney today, but I just wanted input before we talked.

[justbroke]

Speak to your attorney first. It may not be as bad as I paint it, but it could certainly go that direction if this continues. I would certainly seek the attorney's advice and, hey, some of these attorneys have great relationships with the Standing Trustee (not UST). The UST hardly ever gets involved in Chapter 13s.