In chapter 13 and owe taxes for 2010 and 2011

[freeme0215]

I filed for BK 13 in June 2010....I placed my taxes for 2008 and 2009 that were owed in the BK pay back..

NOW

2010 I owe due to Long term disability ot taking out enough taxes for the calendar year

2011 I owe as I got a lump sum from Social security disability and therefore owe taxes..plus part of the year I was getting the LTD also..

The IRS want me to roll the 2010 and 2011 taxes owed into the BK I am paying on now..my attorney charges 600 dollars to do a 13 modification...do I have to go with adding these years to my 13?

Is adding them to the not a rd flag for the BK trustee to not grant the additional payback tothe IRS?

I want to make sure I do the right thing here.

Thanks

[DebtEnder]

Ok I thought you could not add new debt in a Bk13 plan but it seems that Tax debt can be added. However I don't think you can be forced to add it.

Course you may have to look at how much it will cost int he long run. Pay for the modification and not get penalties and interest on what you owe. Or risk the IRS coming after you for not paying, or trying to pay it in a lump sum.

[Ifonly]

On the lump sum SS payment, did the tax preparer use the previous year method of allocating the payment? I ask only because it sounds like you've been on disability for a while and that the payment could have been for amounts from a prior tax year. Also, I would think that the $600 to modify the CH13 would be much less in the long run when compared to the IRS penalties and interest on any payment plan you would get from them. Being in Chapter 13, I doubt you have a lump sum to offer the IRS as an offer-in-compromise.

[Flamingo]

Debt incurred, including taxes owed for the following years in your plan (state or federal) is your responsibility. If your plan can be modified to include them, then in the long run it could be worth it - your attorney can correctly advise. If you don't want to include them or can't include them in a modification, the IRS will work with you as to an installment plan that is not related to the Plan you can apply for with the IRS since you are already in Chapter 13 paying them taxes for prior years in the Plan (the IRS will not allow two payment plans at one time and they consider Chapter 13 payments to them as a "payment plan"). You may be able to voluntarily send in what you can afford to the IRS within a specific period of time while you are in Chapter 13 to pay off the taxes owed. However, you will accrue interest and penalties during that time. Talk to your attorney to find out your best and cheapest option. Best of luck to you.

[HHM]

To add "new" debt after confirmation, I believe the creditor has to consent. (I always forget the rule on this issue).

[lillymarlene]

I agree with Ifonly that $600 may not be that much depending upon the size of your tax debt. I filed during the Fall of 2010 and ended up owing the IRS taxes for that year. The local IRS agent said to see about including the taxes in my plan. However, my attorney said that since my plan was confirmed, this could be a lot of trouble, and it wouldn't look good if I wasn't paying anything at all back to the unsecured creditors. So, I'm now in an "informal" payback plan with the IRS, which hopefully I'll be able to finish this year.

Like other people have said, ask your attorney, since this is probably different for different areas.

[dunno]

I am certainly no expert, but I might add 2 things: 1. when I filed, the IRS rep reminded me that I was not to incur additional IRS debt (I had included 2 prior tax year loan repayments in my plan) BUT, every state has an IRS Advocacy dept. You can arrange a very low cost repayment program through them! No additional atty fees.

[freeme0215]

I went to Legal aid here in Florida...I have the paperwork to do a payment plan. I am waiting to hear from the division of the IRS that deals with a person in bankruptcy..she notified me that I might want to include the incured new tax debt in my Chapter 13...my attorney charges 600$ BK modification. I have already had a BK modification( to surrender my home)...and I am thinking what would be better, adding to the BK or a payment plan?

Are IRS interest and penalties per month and what is the percentage?

Thanks

[pkmj]

How did you even get the IRS to talk to you? I am basically in the same situation and we owe the IRS a LOT for 2010, 2011 (and soon to be 2012).

A little background, 100% - 13 since 2010 - wife had to quit work, medical bills forced us into it. During the time she was sick, the medical bills evened out our taxes, no longer the case. I have went back to zero, we still owe - blah blah blah...

I called the IRS last year asking what can I do, I was told they cannot talk to me and have a person dedicated to people in BK. I called and left messages, never got a call back. I think at the time I may have still been making payments through 13 to them, their money in the plan is now settled. Maybe I should try to call them again?

I talked to my atty recently, took in transcripts for '10, '11 - he told me a case he had recently he was told by the IRS he cannot make a claim for them and they denied being added to 13, so he was going to talk to the trustee about it. Haven't heard back yet... I am also in the process of getting a newer car, so will ask in tandem when I talk to them again...

In the meantime I am stuck and while it will be great to be out of BK (~2 more years), we will end up having all this interest and whatever added to this large some of cash we owe them, then what?

[lillymarlene]

How did you even get the IRS to talk to you? I am basically in the same situation and we owe the IRS a LOT for 2010, 2011 (and soon to be 2012).

When I found out I owed for 2010, I immediately paid what I could and called the IRS about setting up a payment plan. I think I may have been told too, that I could not incur new debt in a chapter 13. Later, however, my local "insolvency unit" of the IRS sent me a letter. Then I was able to start talking to them.

[freeme0215]

I got a letter from the IRS BK division..they sent me a letter stating that because I owe taxes after a bK, they could file for dismissal of BK..I then went to legal aid and they did the paperwork and I am waiting to hear back from IRS.

I have read that you can set up an installment plan with the IRS out side of the BK payments(I am paying taxes for 2008 and 2009) thru the BK. 2010 and 2011 I owe, due to SSD lump sum one year and LTD not taking enough out of my monthly disability check.

I did send a hardship letter also to the IRS.

[lillymarlene]

My first letter from the IRS "insolvency unit" also said that they could file for dismissal of my BK. At the time I just about panicked. (All that work and money for nothing!) Then I remember of "bouncing" back and forth a few times, between calling my attorney and my IRS agent.

[spidge]

How did you even get the IRS to talk to you? I am basically in the same situation and we owe the IRS a LOT for 2010, 2011 (and soon to be 2012).

A little background, 100% - 13 since 2010 - wife had to quit work, medical bills forced us into it. During the time she was sick, the medical bills evened out our taxes, no longer the case. I have went back to zero, we still owe - blah blah blah...

I called the IRS last year asking what can I do, I was told they cannot talk to me and have a person dedicated to people in BK. I called and left messages, never got a call back. I think at the time I may have still been making payments through 13 to them, their money in the plan is now settled. Maybe I should try to call them again?

I talked to my atty recently, took in transcripts for '10, '11 - he told me a case he had recently he was told by the IRS he cannot make a claim for them and they denied being added to 13, so he was going to talk to the trustee about it. Haven't heard back yet... I am also in the process of getting a newer car, so will ask in tandem when I talk to them again...

In the meantime I am stuck and while it will be great to be out of BK (~2 more years), we will end up having all this interest and whatever added to this large some of cash we owe them, then what?

Keep trying the IRS BK specialist number. I was finally able to speak to one and now have notes on our 2010 taxes owed that we will start sending any kind of payment we can, but not until September as my wife does not get paid in the summer. She stated that any payment would work as long as we make progress. Seemed strangely easy, but time will tell.

[freeme0215]

Irs called me and stated that they wished for me to add the 2010 and 2011 taxes owed to BK...I said that adding the taxes to BK would leave me doubling my 13 payments...I said I needed an installment plan with the IRS and she agreed.

SO THIS has been resolved

[freeme0215]

I thought it was...as I got a call from the Bankruptcy Insolvency Unit, she stated she was noting that she agreed to a payment plan...to call the IRS at the main number and get the installment paperwork started..I called, they said I had to call a special number for BK clients..I called that number, they said that to call back the main number again and NOT tell them I am in a BK, just ask for an installment plan...I called back the main number and she said she had notes in my file, I am in an active BK, and she could not help me....at this point, over 3 hours on phone, mostly on hold....I got no where....

No one at the IRS will assist me and they have the notes in the file noting I am ok'd for an installment plan.....i plan to mail a certified letter back to the IRS agent with the BK unit...this is a mess...

I then called my attorney and she said that why was I not waiting till the BK was closed(3 more years to go) and then pay IRS....that means 3 years on no payment to the IRS with interest and penalties