First of all, I'm posting this for a friend so I apologize for any details I cannot give...
One spouse filed Ch13 4 years ago, mainly due to IRS debt. The plan is 1 year away from being discharged/closed, 100% payback. Since the filing date, they owe 20k to the IRS for tax years 2007, 2008, 2009 and 2010. They owe a small amount ($5k) to the state for the same tax years.
As you may be aware, the IRS allows you to pay payments for ONE tax bill at a time. Until this tax bill is paid off, they will not put you on an installment plan. This is where the problem starts. They included previous years tax bills in their initial Ch13 filing. The IRS is refusing to setup a payment plan (outside of the 13) for the 2007-2010 tax bills. They want it now. They are getting more and more hostile with each letter/phone call.
They are considering withdrawing from their current Ch13 and refiling w/ the new tax debt added in (both spouses filing). This will avoid any late fees/interest/etc., that is currently being added to the bill. However, they will start over w/ a new Ch13 and will be paying the attorney/court fees.
Can any of you guys/gals give me your opinions/advice on this? I recommended they do NOT pull out of their current plan as they are so close & then get an attorney to start working with the IRS to get a payment plan worked out. But, I have no experience dealing with the IRS and do not know if they will work with them or go right for the throat. Time is critical, they are meeting w/ their Ch13 attorney tomorrow.
-AA
One spouse filed Ch13 4 years ago, mainly due to IRS debt. The plan is 1 year away from being discharged/closed, 100% payback. Since the filing date, they owe 20k to the IRS for tax years 2007, 2008, 2009 and 2010. They owe a small amount ($5k) to the state for the same tax years.
As you may be aware, the IRS allows you to pay payments for ONE tax bill at a time. Until this tax bill is paid off, they will not put you on an installment plan. This is where the problem starts. They included previous years tax bills in their initial Ch13 filing. The IRS is refusing to setup a payment plan (outside of the 13) for the 2007-2010 tax bills. They want it now. They are getting more and more hostile with each letter/phone call.
They are considering withdrawing from their current Ch13 and refiling w/ the new tax debt added in (both spouses filing). This will avoid any late fees/interest/etc., that is currently being added to the bill. However, they will start over w/ a new Ch13 and will be paying the attorney/court fees.
Can any of you guys/gals give me your opinions/advice on this? I recommended they do NOT pull out of their current plan as they are so close & then get an attorney to start working with the IRS to get a payment plan worked out. But, I have no experience dealing with the IRS and do not know if they will work with them or go right for the throat. Time is critical, they are meeting w/ their Ch13 attorney tomorrow.
-AA
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