IRS Installment Plan Request Before Filing

[gmk]

I roughed out my tax return for 2009 and I'll have to pay a few thousand. When I file I'm thinking of asking for an installment plan as the cash I have I'll need soon for some medical needs.

When I finally file Ch7 in 2-3 months or so would this be considered fraudulent because I entered into a loan agreement knowing I was going bankrupt?

I've read in here that the IRS suspends all installment plans until the BK is finalized and then they go back through the "lien" noise. I recollect I've also read in here that it is possible to go back on the installment plan after BK. True?

[justbroke]

Any agreement with the IRS with installment payments would be dissolved as Bankruptcy dissolves the collection. Once you are discharged, in your Chapter 7, you can go back to the IRS to get on a new installment plan.

It's not a loan, so I don't understand the reference.

[AngelinaCatHub]

Any agreement with the IRS with installment payments would be dissolved as Bankruptcy dissolves the collection. Once you are discharged, in your Chapter 7, you can go back to the IRS to get on a new installment plan.

It's not a loan, so I don't understand the reference.

YEPPERS, as "JB" almost always correct, is again correct. I was "ordered" by IRS to stop payment immediately although on a plan. After my discharged (but not my close) I was informed of a possible levy. Not a problem, I called and again set up my same plan. Still paying it and will finish when I am 91, in which my wife and I wish to retire and take a World cruise. 'Hub

[gmk]

Sorry, I misspoke when I used the word "loan." Repayment plan would have been better.

[viking64]

This has always confused me. I"m on an installment plan with the IRS (started last June, filed in October), which has continued even though the IRS was on the credit matrix. I actually worked out an installment plan for state taxes the week after filing ch 7. The IRS has continued to send me the monthly invoices (for which I'm grateful because paying them was part of my budget and I want to get it over with).

Yet, I read of others stating they agreements are dissolved or the IRS won't even take payments.

[AngelinaCatHub]

This has always confused me. I"m on an installment plan with the IRS (started last June, filed in October), which has continued even though the IRS was on the credit matrix. I actually worked out an installment plan for state taxes the week after filing ch 7. The IRS has continued to send me the monthly invoices (for which I'm grateful because paying them was part of my budget and I want to get it over with).

Yet, I read of others stating they agreements are dissolved or the IRS won't even take payments.

Well, have you filed? I didn't get that fact. You will be notified to stop payment. However, what you can do, since it is not going to be a dischargable debt anyway, is pay on. Please keep track of it. The IRS is not super good at keeping track of payers, only those who don't, except in Government. 'Hub

[viking64]

Well, have you filed? I didn't get that fact. You will be notified to stop payment. However, what you can do, since it is not going to be a dischargable debt anyway, is pay on. Please keep track of it. The IRS is not super good at keeping track of payers, only those who don't, except in Government. 'Hub

Actually, I filed bk, got discharged, and continued to receive installment notices and make payments throughout.

Here's the timeline:

6/2009 - installment plan worked out with IRS.
7/2009 - Begin making payments through monthly statements
10/2009 - File Chapter 7
11/2009 - Receive IRS payment notice and pay as usual
12/2009 - Ditto
1/2009 - Ditto
2/2009 - Discharged, and payment notice continues as usual

IRS was included in creditor matrix, and nothing changed as a result of filing chapter 7.

In the meantime, I also worked out an agreement with the state after filing Ch 7 but before discharge and made payments throughout.

The Student Loan portion of my debt responded as expected - loss of online access, and no payments; but the tax plans continued as if nothing ever happened, which was fine by me.

This is why I'm confused - why was nothing automatically triggered in my case, when other people have their payment plans put on hold? I'm not bothered by it, just curious.

[justbroke]

I think you slipped through the cracks. The IRS is pretty good at dealing "properly" with Bankruptcies. They should know too, as they, the IRS, has been sued many times inside Bankruptcy cases for violation of the automatic stay by continuing to collect! Even in cases where they offset a back tax debt by taking a refund! The IRS has learned the hard way, so when I hear that they missed a case, I just think... idiots.

[viking64]

Hmm. I just assumed that since the tax wasn't dischargeable and that I had voluntarily worked out a plan, it wouldn't mater.

Thanks.

[AngelinaCatHub]

Hmm. I just assumed that since the tax wasn't dischargeable and that I had voluntarily worked out a plan, it wouldn't mater.

Thanks.

It doesn't. When we got our so called stimulus check, the IRS ate mine. Being an asset case though, the payout went 100% to the IRS, less the Trustee cut and his lawyers cut (for insider 4002). 'Hub