Owing Taxes to IRS for 2010 in active 13

[lillymarlene]

This forum has such great advice. Another thread prompted me to ask this. I am in an active 13, 5/48 payments in (not cofirmed yet) and I filed the end of October last year. About a week ago, I found out from my accountant, that I owed the IRS for 2010. (I have a small business, but I had not sent any quarterly taxes in for last year.) The taxes were electronically filed. I immediately sent in to the IRS and state what I could, and now owe $2,400 and $400, respectively. I also, estimated my 2011 quarterly taxes and sent payment for those. Then, I called both places, and asked about setting up installment plans.

The IRS asked what I would like to pay in, and I said: $100 per month. (I hate dealing with IRS and I don't want to short myself.) Though, I really hope to clear this up by the end of the year.

My question is will this have an affect on my 13? I'm really trying to just stay "under the radar" and hopefully just quietly pay this off. Has anybody else been successful doing just that?

I know I'll probably have to ask my lawyer about this, but in some ways I hate to. He'll probably have to file some form for me, and it looks like everything he does starts at $250.

[AngelinaCatHub]

I'm not a C13 Guru, but you probably read my post on a current thread. The C 13 probably will dictate that you put them into the system. We had no choice in our 7 as they told me NOT to pay anything further until discharge of dismissal. Then they picked up on it. If you have a 13 lawyer yes I would ask but if he's that much of a picker I would wait out other answers. Justbroke one of our newest Mods went pro se on a 13 and then converted to 7. He had a tough time, but he knows his stuff. PM him to respond to this thread as we would all wish to know. I'll research a bit and get back. 'Hub

[AngelinaCatHub]

Automatic Stay

A Chapter 13 debtor is protected by the automatic stay provisions found in 11 USC § 362.

The stay operates until the Chapter 13 case is dismissed or closed, or a discharge is granted or denied. 11 USC § 362(c)(2). Because the discharge is not granted until all payments have been made under the plan, the stay remains in effect throughout the entire period of the plan.
Note:

The IRS may request relief from the automatic stay in certain circumstances (e.g., lack of adequate protection). 11 USC § 362(d). Consult Area Counsel to determine whether seeking relief from the stay is appropriate.

Under BAPCPA, if the debtor had one or more bankruptcies pending within a year before the current bankruptcy, the stay may terminate early or may never go into effect. The stay may terminate 30 days after the petition date where one prior bankruptcy was filed, and it may never go into effect where there were two or more prior bankruptcies. The debtor may be able to proceed to confirmation even if the automatic stay is deemed to not be in effect. Consult Area Counsel for advice on how to determine the duration of the automatic stay in these situations.

The duration of the automatic stay affects the running of the collection statute of limitations and how long it is suspended under IRC § 6503(h). Serial bankruptcy cases make it difficult to calculate the statute of limitations. Consult with Area Counsel to make these calculations.

Additionally, creditors are stayed from collecting from co-debtors on consumer debts. 11 USC § 1301. Consumer debt is defined in 11 USC § 101(8) as debt incurred primarily for a personal family or household purpose. Tax liabilities are not included in the definition.

5.17.11.9 (10-01-2010)
Adequate Protection and Turnover

Lack of adequate protection can be a basis for the IRS to resist turning over property of the estate to the trustee. See In re Hooper, 152 B.R. 309 (Bankr. D. Colo. 1993). Adequate protection typically means periodic cash payments. In a Chapter 13, the debtor is required to initiate payments within 30 days of the filing of the plan. 11 USC § 1326(a). Confirmation is achieved fairly quickly in most Chapter 13 cases, binding the Government to the terms of the confirmed plan. Thus, adequate protection has been determined by some courts to be provided by the periodic payments required by the confirmed plan. United States v. Reynolds, 764 F.2d 1004 (4th Cir. 1985); United States v. Norton, 717 F.2d 767 (3d Cir. 1983).

http://www.irs.gov/irm/part5/irm_05-017-011.html#d0e198

[Flamingo]

Since you are not yet confirmed, contact your attorney. It may or may not be possible to include those taxes in your Chapter 13 plan. However, if you owe for 2011 or on out, once you file and are confirmed, all debt thereafter is your own responsibility so ensure you budget/plan accordingly.

[Pandora]

As Flamingo pointed out - the very first thing you should've done is contacted your attorney to ensure you could set up a payment schedule since you havent been confirmed yet. That extra $100 a month the trustee will surely want to know about since you've committed it to payment. IRS will get paid one way or another, but while in an active BK - always consult your attorney first before agreeing to pay anyone $X amount.

ETA: Check your agreement with your lawyer - if you are able to add this to your plan, it should only cost around $26.00 to file an amendment / modify your plan; not $250. Seems $26-$40 is the standard rate going from what I've seen on here (ours was $26)

[MOMof3]

You should be able to include them in your plan. When we filed, we included "estimated" taxes, then the IRS eventually filed the claim for the actual owed once our taxes were done. We ended up owing for 2009 and set up a payment plan with the IRS without any problem.

[lillymarlene]

Thank you everyone, guess I will just have to contact my lawyer and put this into my plan, even if I have to pay him extra.

only cost around $26.00 to file an amendment

Unfortunately, I think mine charges around $250. I had to add on a creditor after filing, and I found out he charges $250 each. In this district, the "new" amended plan must be mailed to all the creditors. But I guess it's less than having to pay large interest charges to the IRS.

Then, I hate to make my plan payments much larger. I'm fairly comfortbable at $210, being closer to $200 than $300. Right, before filing I found I owed on one of my business ccards $10,000 that wasn't in my matrix, and this would have put my plan up to $270 for 3 years. I then asked for an additional year if I could keep this at $210.

It also may be possible for me to get help from a family member, and pay this off within 90 days, which I suppose would be the best case.

[lillymarlene]

Update: Owing Taxes to IRS in active 13

I just want to update about what happened with my tax situation (maybe it could help someone else, too.)

I tried to set up a payment plan with the IRS a couple of weeks ago, hoping that I could do this quietly, but no such luck. Last weekend I received 2 letters from the IRS, one stating that I maybe could not have a formal payment plan, since my bankruptcy is ongoing and referring me to my local office. The letter from the "local" office stated my 2010 taxes were incurred after my c13 filing and were not included in the "IRS' proof of claim." The letter also instructed me to pay in full, and/or call the agent listed and failure to respond could result in my bankruptcy being dismissed.

So, first thing after the weekend (amazing how this kind of info always gets to you when you can't immediately do anything about it :-) I called the IRS agent. She said: Since the taxes happened last year, why not call my attorney and have them amended into my plan?

So, I called my attorney, and WOW he sure hates to amend plans! (Last year, I had him add on one creditor right after filing and he nearly went ballistic.) This time he said: But your plan is all set, ready to go, it can't be changed or amended.

Then actually because of things I've learned from reading this forum, I replied: Well, unless something has happened this morning, my plan hasn't been confirmed yet. It's my understanding that maybe my plan could still be amended if it hasn't yet been confirmed.

Then he said: But why don't you just set up a payment plan with the IRS? And also for that little bit of money $2,400, everything should be left as it is. He also said that I just didn't realize how difficult it is to change a plan.

I told him that the IRS suggested that I amend my plan and put last years taxes into it . I also mentioned that I would pay him his fee for that service. That it seems to me that his price, $250 sure is much less than immediately having to come up with $2,400. I also apologized for the extra trouble, and reminded him that he'd told me last year, how awful it is to have to amend a plan. Actually, I do feel kind of bad about it, since in my district I guess, they have to re-mail all the creditors again (the "bk declaration,") instead of just filling out one little form, as in some localities.

Well, he agreed to do it. Next week, I guess I'll call and see how much I should send him.

Thanks again for everyone that replied to this thread.

[BigJohn]

To original poster: If you own a small business, I would recheck my losses. Is their some products you sell that are not worth what you paid for them? You could take this as a loss against your profits.

[lillymarlene]

BigJohn, I temporarily lost some records from having to move my business into my house, in a hurry last year. Unfortunately, after April 18th I found receipts for interest on a bank loan for the business and a business credit card that I had been paying up until the middle of 2010. I could have deducted these items, but I guess that's too late now.