Question OIC Pending and 2021 Extension

[xyta777]

Two questions relating to Ch 7 and taxes:
1) In November of 2021 I sent in an OIC and it has been pending consideration ever since. I haven't heard back from the IRS if they have accepted or rejected my offer. How does the Ch 7 interrupt this process? I'm aware of the 2/3/240 rule, but I noticed my IRS account under "Payment Plans" the language changed to "Due to indications of bankruptcy or insolvency...". Did my Ch 7 torpedo my OIC?

2) I haven't filed my 2021 Fed, but have an approved extension on file. All previous years have been filed. Is this sufficient for the purposes of the trustee? I thought about sending my Wage and Income transcript or my State 2021 return.

Thx folx,

[justbroke]

Two questions relating to Ch 7 and taxes:
1) In November of 2021 I sent in an OIC and it has been pending consideration ever since. I haven't heard back from the IRS if they have accepted or rejected my offer. How does the Ch 7 interrupt this process? I'm aware of the 2/3/240 rule, but I noticed my IRS account under "Payment Plans" the language changed to "Due to indications of bankruptcy or insolvency...". Did my Ch 7 torpedo my OIC?

When a bankruptcy is filed, all collection activity is stopped by operation of what's known as the automatic stay. Even the IRS is subject to that stay.

2) I haven't filed my 2021 Fed, but have an approved extension on file. All previous years have been filed. Is this sufficient for the purposes of the trustee? I thought about sending my Wage and Income transcript or my State 2021 return.

If you filed your bankruptcy after 12/31/2021, then you MUST file your 2021 Federal tax return. The bankruptcy (estate) must know the tax status as of the date of filing in order to be processed correctly. (And, because it's the federal government which oversees bankruptcies, there is a general rule that all prior year returns must be filed in order to receive a discharge.) The extension to file will not matter. The Trustee will usually want it filed by the 341 Meeting.

Did you file Pro Se? If so, then please contact your Chapter 7 Trustee to find out what they need from you prior to the 341 meeting.

[xyta777]

Thanks, I did file pro se, I appreciate your response. I did email my trustee, haven’t gotten a response yet. I believe my return is about 90% of the way there, I think I’ll prioritize getting it e-filed quickly then. I appreciate your response.

[justbroke]

Thanks, I did file pro se, I appreciate your response. I did email my trustee, haven’t gotten a response yet. I believe my return is about 90% of the way there, I think I’ll prioritize getting it e-filed quickly then. I appreciate your response.

You need to call the Trustee or, at least, try to find if they have a website. Many of the trustees do have a website and will have valuable information there. I have found that most Trustee offices don't return emails to non-attorneys; some do, others don't since they assume you're represented. Just keep calling until they answer. Most Chapter 7 (panel) Trustees are practicing attorneys (some are CPAs) that maintain a regular practice. It can be difficult to reach the Chapter 7 Trustee.

I hope they respond within the next week or two since most documentation is required to be given to the Trustee at least 7 days prior to the 341 meeting.