Would you file if you were me?

[Argh]

Greetings,
Would love the boards advice at this point.

Here's my situation:

I have very little debt, no cc's a few grand in medical. BUT .. I owe big time to the IRS.

I owe about 110,00 personal. Another 50,000 for my business.

I currently have payment arrangements made with the IRS and state to the tune of about $2500 a month, which I have been making on time. Yikes! And I still have to set up arrangements with the IRS, who is probably going to want another $1000 a month. All fine and well, but meantime I'm not able to keep up with my current taxes, and that is not good.

So I'm thinking about a bk-and fast!

My lawyer tells me I cannot file a 7 because I have an asset worth about $25k to 30k and that is more than is allowed, of course.

Insteand, he has worked out a plan for a chapter 13:

Personal debt: Pay 0% of the dischargable debt, 100% of the non-dischargable. This is about $50,000. I would agree to pay about $1800 a month for 36 months to pay this off.

My company would simply shut down. I owe my company about $100,000, but that debt will be listed on my 13. I will also list the corp taxes on my 13. He feels that this strategy will make the corp tax liability go away.

Right now, my credit is okay but not great. I don't want to file a 13, but I am afraid the monthly payments to the IRS are just going to be too much. I fear I've dug myself into too deep a hole and at 49 I'm afraid I'll be paying this off forever. I make too much (about $140k yearly) to make an offer of compromise, my lawyer and accountant tell me.

On the other hand, I'm afraid a 13 will ruin my life and be just plain horrible. I wonder what it is like having someone tell you what you can and cannot do with your money? My wife is from Asia and I am even wondering if we'll be able to visit her elderly father??

What should I do??? What would YOU do?

HELP!!!

THANK You for taking the time to read this.

[Argh]

You guys know your stuff. Any advice would be appreciated.

Maybe my post is too long and complex, but I am torn about what to do and need to decide today. What would YOU guys do?

[HHM]

Well, right now the IRS is telling you what you can and cannot do with the money.

Since you have already met with an attorney, I am assuming you have already established what if any of this tax liability is or is not dischargeable. If the tax debt is largely non-dischargable, then a chapter 7 would not help (especially since you have no other significant unsecured debt).

One thing a chapter 13 allows you to do is pay the IRS on your terms, not theirs. Also, a chapter 13 trustee is not looking over back saying what you can and cannot do with your money. For the most part, you live your life as normal but for the fact that you have to make a payment to the chapter 13 trustee every month. The only time you have to deal with the chapter 13 trustee is if you plan any major purchases, i.e. house or car. Otherwise, you can spend your money and use your credit cards how you want after you chapter 13 plan is confirmed.

It seems like this is a no brainer, if, under a chapter 13 plan, you can reduce your payment by $700 per month and still pay off the IRS and be free of them in 36 months, do it.

[quinnpa]

I would call a tax attorney first! My brother had owed the IRS around $25,000 in personal income tax with penalties and such and hired a tax lawyer who promised him a settlement for "pennies on the dollar". He was price, about $1,200 for his fee but it was more than worth it, he settled my brothers debt for $2,500!!! 10%, I couldn't believe it!!

I would take a look at the yellow pages for a tax lawyer or call 1-800-lawyers for the lawyer referral service.

[HHM]

I would call a tax attorney first! My brother had owed the IRS around $25,000 in personal income tax with penalties and such and hired a tax lawyer who promised him a settlement for "pennies on the dollar". He was price, about $1,200 for his fee but it was more than worth it, he settled my brothers debt for $2,500!!! 10%, I couldn't believe it!!

I would take a look at the yellow pages for a tax lawyer or call 1-800-lawyers for the lawyer referral service.

True, but it looks like Argh looked into that to some degree. Ultimatly what your brother did was an offer in compromise and what Argh says, he probably makes too much money for that. Plus, you pretty much have to do the same work (i.e. provide the same info) to do OIC as you would to file Bk.

But true, it wouldn't hurt to consult a tax attorney to see if you have any options.

[nodinero]

I would call a tax attorney first! My brother had owed the IRS around $25,000 in personal income tax with penalties and such and hired a tax lawyer who promised him a settlement for "pennies on the dollar". He was price, about $1,200 for his fee but it was more than worth it, he settled my brothers debt for $2,500!!! 10%, I couldn't believe it!!

I would take a look at the yellow pages for a tax lawyer or call 1-800-lawyers for the lawyer referral service.

I second that. A good, repeat good tax attorney can probably find issues with the Tax debt the IRS claims you owe, if it has arisen from business audits, and Subchater S "forwarding"...

[nodinero]

True, but it looks like Argh looked into that to some degree. Ultimatly what your brother did was an offer in compromise and what Argh says, he probably makes too much money for that. Plus, you pretty much have to do the same work (i.e. provide the same info) to do OIC as you would to file Bk.

But true, it wouldn't hurt to consult a tax attorney to see if you have any options.

Yes, but there are other options. Especially if a corporation was involved. Most agents in an audit don't consider starting ownership equity in their calculation of basis for Subchapter S profits forwarded to shareholders. If you can show a reasonable challenge to the miscalculation of basis, if that in fact is part of the problem for Argh (hasn't said this - but I'm suspecting), then a good Tax Attorney can sue the IRS for Argh and challenge the debt (outside an OIC).