IRS intent to Levy on debt included in Ch 7

[mlpntr]

I filed chapter 7 and included an IRS debt from 2003 in my list of creditors. They assessed a $4000+ debt a year before I filed by disallowing something or other with my taxes and wanted me to pay back the return I received.
My discharge was March 12th 2007 and closing was March 16th 2007. I received an IRS notice of levy on the debt today.
They did not object to discharge or anything through my bankruptcy. So now what do I do? Do I owe the money or was it discharged? There is nothing in my bk papers that say it wasn't discharged.

[CATCHMEIFYOUCAN]

If you had a lawyer I would consult the lawyer. The IRS are tricky sons of guns and seem to win every case by some red tape !

Best Wishes, CMIYC

[ilovemycaitybug]

Boy, I haven't a clue. Best of luck to you, though! Can anyone tell me why government debts like student loans are such a problem??? They can be SUCH a burden!

[CATCHMEIFYOUCAN]

With student debts my only GUESS is I BET millions of people would try to file if the could go BK on their student debts. Students debts can add up to THOUSANDS of dollars. Get a student loan for $100,000 study to be a DOCTOR of some sort, a LAWYER what have you. Get your degree, get a great job make good money. FILE BK, get rid of you student debt. You just earned yourself a fine degree - scott free ! Hmmm

CMIYC

[ilovemycaitybug]

Ahhh... okay, I guess I see what you mean. Too bad for the rest of us who are filing anyway, though! Thanks!

[CATCHMEIFYOUCAN]

That was a harsh comment from me and I do apologize for anyone that I may have offended CUZ YOU KNOW WHAT ! I gambled most of my debt ! So IM NOT BETTER ! ! ! LOL

CMIYC

[SinkingFast]

Did you file Old Law or New Law??

New Law, probably the IRS debt couldn't be discharged.

Tax Relief in a Chapter 7 Bankruptcy

Chapter 7 Bankruptcy will eliminate all income taxes except the following tax liability:

a. Taxes for which a tax return was due to be filed within three years (plus extensions) prior to the date of filing bankruptcy. For example, the tax return for 2003 income taxes was due to be filed on April 15, 2004 (plus any extensions), and therefore, these income taxes cannot be discharged by filing bankruptcy on or before April 15, 2007 (plus the time of extensions); OR

b. Taxes assessed by the IRS within 240 days before the filing of bankruptcy. Assessment date is the date that tax liability is entered on IRS records; OR

c. Taxes not yet assessed but still assessable; OR

d. Taxes for which a tax return was filed late and filed within two years prior to filing bankruptcy; OR

e. Taxes of a debtor who committed fraud related to a tax return or willfully attempted to evade or defeat taxes sought to be discharged.

Income taxes that do not fail any of the above five tests may be wiped out in a Chapter 7 Bankruptcy.

http://www.alperlaw.com/taxes_and_bankruptcy.html

Old Law may have been different.

[mlpntr]

Well, it looks like I got my answer. I'm not happy about it but that's life.
So what harm can the IRS do?
I had a no asset Ch7.
I don't own a home and the car I drive is and never was in my name.
I'm a single mom with child suport and SSI for one of my 4 children to support us with. No job since my last lay-off 2 years ago.
Who's butt should I pull it from?

[SinkingFast]

You can set up a payment plan with the IRS. I seem to remember they'll give you up to 10 years to repay. They can also apply any refunds you may get during the plan to the amount you owe.

The problem with a lengthy payment plan with the IRS is their interest. It can add significantly to what you'd repay if you take several years for your payment plan.

[lrprn]

mlpntr, you said in your original post that the taxes were owed for 2003. I'm assuming you filed your Ch 7 in 2007, correct? According to http://www.wwwebtax.com/audits/bankruptcy_code.htm -
"...if there was no tax fraud involved and the tax return was filed then there is a point in time when IRS tax can be discharged in bankruptcy and when the IRS can no longer commence tax collection proceedings. As a result of Bankruptcy Code Sections 523 and 527, the following IRS tax is generally dischargeable:
- Tax penalties for nonfiling, tax penalties for late payment, tax penalties for late deposit, and tax penalties for late estimated payments; and
- Income tax, excise tax, and gift tax which is over three years old, has been filed at least two years prior to the bankruptcy petition, and/or has been assessed as an IRS tax audit deficiency for at least 240 days."

If your taxes are more than 3 years old, that fits. If you filed them before 24 months ago, that fits. And if the IRS tax audit has shown them as a deficiency for at least the last 20 months, that fits too. Which of these requirements don't fit your situation?

If you do owe the taxes, have you thought about using the IRS's offer in compromise program? See http://www.irs.gov/businesses/small/...104593,00.html and http://www.taxprophet.com/faq/981213.htm for a good explanation of how to accomplish this - it can result in considerable tax savings!

[SinkingFast]

I think I see where the rub is.

Taxes from 2003 were due and payable on or before April 15, 2004. 3 years from April 15, 2004 is the tax filing deadline in 2007. In this case,...... This year,....... That's April 17th, 2007.

A few months later in filing could have made a huge difference in the dischargeablity of the tax debt.