Owe IRS during Active 13

[steveok]

I have read a lot of the forum and I'm hearing so many different directions people have gone with owing taxes during an active Chapter 13.

We filed end of September, 2010, confirmed, mid January, 2011. We have IRS and State taxes included in our plan.

Just got back from the accountant. We will owe approx. 3k to IRS, and approx 1K to state for 2010. Obviously filing late September '10 didn't give us enough time to make adjustments for the 2010 taxes.

What have others that have been in this situation been able to resolve this year? We will be changing our withholdings immediately to ensure we're not in the position next year.

[IamOld]

Great question!!! I owe a lot to IRS (am paying thru payment plan now) if I do - do Ch 13 - if that's where atty puts me - IRS will be in plan??? No problem with me...but excellent quesiton - what happens to new taxes I owe??

[newbie2]

Since this is new debt you need to talk to your attorney. Some people have been able to add that new tax debt to their plans, others make payment arrangements directly to the taxing authorities. Good luck.

[jetsfan2010]

make a payment arrangement directly with the IRS, very easy to do and as long as you are proactive with it, shouldnt be an issue

[jmac]

Im pretty much in the same boat, going to try to set up a payment plan...Someone told me i should try a offer of compromise....

[Flamingo]

Any debt you incur after your filing date is debt for which you are responsible. Unless your attorney advises you otherwise (i.e., can somehow include in your active 13), your taxes owed for 2010 are your responsibility. While in an active Chapter 13, the IRS will not allow you to have a payment plan with them as they do not allow two payments plans (they consider your Chapter 13 a plan payment). That is because you already have them included in your filing. If you did not, you could work with them to pay out what you owe over the next five years.

What you need to do is contact the IRS bankruptcy section for your area and they will have your information since you already included them in your filing. They will advise you what can and can't be done. We went through it and, per the IRS' instructions, sent in what we could on a monthly basis until paid in full. You will accumulate interest and penalties during this time since your taxes were not paid in full when due.

[minan]

All, take a look at 5.17.11.14 (10-01-2010) Collection of Postpetition Taxes (http://www.irs.gov/irm/part5/irm_05-017-011.html#d0e399). We did this to include the taxes in our plan.

[jmac]

Any debt you incur after your filing date is debt for which you are responsible. Unless your attorney advises you otherwise (i.e., can somehow include in your active 13), your taxes owed for 2010 are your responsibility. While in an active Chapter 13, the IRS will not allow you to have a payment plan with them as they do not allow two payments plans (they consider your Chapter 13 a plan payment). That is because you already have them included in your filing. If you did not, you could work with them to pay out what you owe over the next five years.

What you need to do is contact the IRS bankruptcy section for your area and they will have your information since you already included them in your filing. They will advise you what can and can't be done. We went through it and, per the IRS' instructions, sent in what we could on a monthly basis until paid in full. You will accumulate interest and penalties during this time since your taxes were not paid in full when due.

Wow that is crappy news and to make it even worse i didnt need to include the 800 bucks i owed them and put in the 13, it was a error by my work that hadn't been cleared up that all the employees got hit with...

[grndmom53]

We filed chapter 13 in 2009 & included federal & state taxes that were owed which are included in our Chapter 13 payment. When we filed taxes in 2010 we owed federal taxes again.

We are now on a payment plan with the IRS for the 2010 taxes, so not sure why Flamingo feels "it is not allowed". The IRS sent us papers & we had to sign them, & pay $100 monthly directly.

[jetsfan2010]

We filed chapter 13 in 2009 & included federal & state taxes that were owed which are included in our Chapter 13 payment. When we filed taxes in 2010 we owed federal taxes again.

We are now on a payment plan with the IRS for the 2010 taxes, so not sure why Flamingo feels "it is not allowed". The IRS sent us papers & we had to sign them, & pay $100 monthly directly.

Did you owe back taxes that were included in your 13 from prior years? I think Flamingo was saying have 2 diff. pay plans with the IRS(1 with your BK, 1 outside the plan).

[IamOld]

So...IRS COULD consider another payment plan BESIDES the Ch 13???

[jetsfan2010]

I dont believe they will, if you included back taxes in your 13. As always, contact your attorney for clarity(I did)

[iha]

The IRS allowed us to add additonal taxes owed into our Chapter 13 repayment plan after we were already confirmed and into it for almost a year. But, the state taxes could not be added in and we've been paying $150 a month for a year now. Last payment is next month! woohoo! Don't know why the state was such a pain to work with but the IRS was actually great. Not a problem...
This year we are able to pay it in full but I'm waiting until the last minute!

[stratos]

You can ask the IRS (Special Procedures, I believe) to file a 1305 claim so that post-petition taxes can be included in your plan.

[jmac]

My lawyer said i can get it in the plan but my plan will go up $100.00, I will let you know if she is right by april 15th lol.