We owe $4,000 in income taxes from the 2008 tax year that we are currently making payments on every month. If/when we file Chapter 7 will we still have to pay this? What if we file Chapter 13?
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2008 won't be dischargeable in either chapter -
biotechsolution is correct - if you file now you can discharge IRS income tax liability from 2005 and older, and after April 15th, 2010, if you file you can discharge 2006 IRS income tax liability.
You do have an option though - in a Chapter 13 the debt will not accrue additional interest of penalties so you can pay it off faster. Don't file BK just because of $4k in IRS debt though. To make it less painful, reduce your deductions by one so you're paying a bit more in income taxes each pay period and when they take your refund next year it could pay a huge chunk of it to them. I know it sounds counter-intuitive since you're already paying a monthly payment, but it works for the same reasons the IRS takes withholding from each check - if you don't see it, you don't realize you didn't get it.
--WilliamI am an attorney, but I am just not your attorney.
As such, any statement is not intended to create an attorney/client relationship.Comment
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We are not filing because of the tax debt. We are making monthly payments to pay this off, which is fine. I just wanted to make sure that this wouldn't be included in the our BK. Thank you!!Comment
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