Question with Tax and mean test expense

[badandy]

Can anyone please answer this question? If I owe the IRS tax and is currently making monthly payment, can those monthly payment be consider an expense when it comes to calculate disposable income on the mean test? Or is that consider a debt to be discharge like a cc payment and excluded from the test even thought taxes are none dischargeable?

[Phillymanhere]

I'm sort of a newbie, but I did some research for a friend who owes a ton of back taxes to the irs. I think you can discharge irs debts that are three years old as long as you have been filing on time in recent years. (My friend hasn't been filing at all in recent years; so he's going to have trouble.)

If they are less than three years, my understanding is that you can list them as spending/payments (because you can't discharge them). If they are more than 3 years old, then you can include as part of your bk.

[badandy]

thx philly, mine are less then 3 years old. i dont mind paying them as long as i can include them as expense in the mean test so i can qualify for ch7 and discharge other debts. can anyone else confirm this?

[diviaruba]

They are considered priority debts, and non-dischargeable. Any existing payment arrangements are not includable as expenses on a monthly basis. The priority debt is summed, and the total divided by 60. This is entered on line 44 of the B22A. So, there is an impact on your current monthly income for the means test, and it may be higher or lower than your current payment arrangement.

[badandy]

diviaruba, so if i understand you correctly, they will reduce my income on form b22a but will it be enter in the schedule J too when it comes to determining disposable income?

[Phillymanhere]

badandy,

There might be a communication problem here.

The other posters are saying yes, yes, yes you can include it on Schedule J. That's what they're saying .... It's a priority payment. What that means is that it is THE MOST legitimate expense to put on schedule j.

I hope that helps.

[badandy]

Sorry for the confusion. I haven’t slept well in a long time. What I’m asking is basically I’m in the process of filing my tax and I owe a lot of back taxes. If I enter into a payment plan with the IRS and pay it on a monthly basis and file BK in the near future can use the payment as a way to increase my expense on the scheduke J and hence lower my disposable income to qualify for ch 7. Thanks for all the replies.

[Help!]

No apology necessary... I've been sleep deprived for months now. Anyway, diviaruba explained how this payment affects the means test. You are wondering how this payment is accounted for on schedule J. It is a priority unsecured debt (just like child support, student loans) and non-dischargeable. The good news is that it is a payment for which "there is no reasonable alternative" according to BAPCPA, which means it stays on schedule J as an expense. By all means, get squared away with the IRS and find out what that payment will be prior to filing. The less uncertainty in your petition, the better off you'll be.

[badandy]

thx for answering my question.