IRS Tax Deficiency, Pre-Chapter 7

[Fresh]

Hi Everyone,

I wondered if anyone had experience with this situation. I am filing my personal income taxes for 2008 (Tax Year) this month (extension), but I will not be able to pay the amount which is about $5300. I sent both the feds and my state nominal $100 w/the extensions.

When I receive the deficiency notice, do I call a number to make payment arrangements and is it at that time that I should tell the IRS that I will be filing bankruptcy before the year is out? I am really scared about all of this but I know how important it is to get the return filed. All prior years are up-to-date.

Also, I've been unemployed for months doing random temp work, drawing unemployment during the down times and I will be starting a new contract job (at-will, slated to go for 6 months) and I'm wondering if the IRS will give me some leeway in terms of getting my financial situation together. I have no assets other than about $500 in the bank at this point. I don't own any real property. I need to be able to earn some money so that I can hire an attorney to file my Chapter 7.

Thanks,

Fresh

P.S. If you know anything about how the Commonwealth of Virginia also deals with deficiencies that would also be greatly appreciated. It's much lower than the fed amount.

[AngelinaCatHub]

You are aware you cannot BK out against taxes that are less than three years from the date they became owing. Also if you file for an extension you must pay ALL your taxes in by 4/15 or you still get the penalty and fees for filing late. An extension is an extension to file not to pay. Why are you sending them a $100 of you owe $5300? As for your state I don't know what the laws are on your states taxes. Most tropically they copy Federal Laws.

And yes the IRS will go through the automated collection system to start. Lots of notices with dates to pay by will a slug of penalties and interest. The IRS is not going to care about your BK since it won't effect them at all. You owe the taxes.

This is true, and I would advise upon your first notice of taxes due, that you call IRS and arrange payment plans. Do this first and before your bk, don't put them off. They are very nice (believe it or not) and you may pay by internet through EFTPS a collection firm the IRS uses and at no cost to you.

Now when you file bk, they will be notified and you will get a letter to STOP PAYING and your EFTPS account will be closed. This is a good thing. Some of your penalties and interest can be written off in the bk, but not anything after you have filed. The automatic stay also tolls the IRS.

Now after your discharge, their bk department will let the regular billing begin again. Then call them again, to arrange the payment plan over. What ever you pay, will go first to the oldest year you owe. If you owe one that is fine. We owe to 2004 through 2007. About 27K. We found we were very tight money wise and I called to ask permission to lower our agreed payment of $550, down to $400. They were most cooperative. The real deal is, DO NOT MISS a payment or they will disallow a payment plan you will be garnished even in states that do not allow garnishments. It is after all, the IRS. 'Hub

[Fresh]

Thank You Both

BigBoy,

I do understand about not being able to include these taxes in the bankruptcy. With the token amount, I sent that back in April. I do realize the penalties and interest and that is included in the total amount I noted here. I appreciate your note about the state copying federal law.


Angelina,

I really thank you for noting the attitude of the IRS. I plan on contacting them promptly and setting up a payment plan, and I had no idea anything could be written off with the bankruptcy so that's helpful, too.

You have both eased my nerves!

~Fresh~