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IRS refund Ch 13 100% plan and confirmation question

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    IRS refund Ch 13 100% plan and confirmation question

    Hello! My husband and I filed Chapter 13 in June 2019. Our 341 meeting was in August and interim confirmation was filed at that time. Confirmation hearing scheduled for 12/19 was continued until Feb 27, 2020. Checked PACER and no reason was given.

    We are in a 100% plan and we owe $28k to the IRS. $675 is priority and the rest is unsecured. Most of the tax debt is from a return several years ago (2012) and at that time, the IRS was going to file a lien. I set up a payment plan and the collections agent asked me why we owe so much for one year (I think it was $11k for that year) and I replied I didn’t know. Next thing I knew, the IRS instructed my husbands employer to change his withholding to single and zero exemptions. We’ve been receiving refunds since which has gone to offset what we owe.

    Now fast forward to this year. We are due a sizable refund. The status on the IRS refund site has said processing our return for the past three weeks (We filed on 1/28). I’m wondering if they are holding our refund due to our plan not having final confirmation? I also read that the IRS can ask for release from automatic stay in order to post the refund towards pre-petition arrears. Does anyone have experience with this?

    Next...I’d love for the IRS to allow us to change our withholdings as it would add another $225 to my husbands pay every two weeks. I’m wondering since we are in a 100% payback plan if they would allow this?

    I appreciate any input!

    #2
    It is not likely that they are going to hold it to offset prior taxes. They did not offset/setoff my taxes in any year that I was in a Chapter 13. You may want to call the IRS Insolvency Department for any more details.

    Also, you can change your withholdings with proof. You just have to call them! They were very nice to me. My company received one of those letters and told me. I followed the instructions on the letter and the IRS agent helped me change my number of deductions back to 12 because I owned a home and had significant property tax, a family, and other deductions.
    Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
    Status: (Auto) Discharged and Closed! 5/10
    Visit My BKForum Blog: justbroke's Blog

    Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

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      #3
      Thanks for your reply! I will probably call today just to check status. I am wondering if they hold processing of tax refunds until plan is confirmed.

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        #4
        UPDATE: Checked the IRS website and our refund has been approved! It took nearly a month after e-filing, so definitely a delay, however I am relieved that we a going to get a refund this year.

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          #5
          Libertybell - Yay!! I'm sure the IRS is extremely busy right now...so sometimes patience (although frustrating) was all that was needed. I'm glad your refund was approved. Does your attorney know you are getting a refund? Better to be upfront then hope they don't find out. Good luck going forward.
          Filed Chapter 13 - 07/20/12
          Discharged 8/2/16

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            #6
            Thanks sophieann! And yes - I plan on contacting my attorney tomorrow..just in case! 😉. I was waiting to see if we would actually receive the refund or not. Hopefully since we are in a 100% plan we are good to go!

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