In Ch. 13, and owe IRS for 2004

[jake]

In doing preliminary work on my 1040, it appears there was not enough withholding taken out, and I owe $900. Because I am in Chapter 13, I am uncertain what to do--since I'm not making enough "extra" money after the monthly payment to have saved or cover the amount.

Is this a common problem? And are trustees willing to let you postpone a payment or two to pay the IRS debt and then resume the payments with two months tacked onto the end date?

I realize notifying my attorney is probably the next step, but if anyone has had experience in this situation, I'd appreciate any information. Thanks in advance for any light anyone can shed on this.

[klux]

SAme thing happened to us this year. My suggestion is to pay it up front and don't tell the Trustee. I contacted the IRS Insolvency branch like indicated on one of the IRS extension forms and they said that they would file a post petition claim and that the chapter 13 plan would then pay the taxes, NOT TRUE! Two days after this conversation with the IRS I received a letter from my truestee, it was a MOTION FOR DISMISSAL FOR FAILURE TO PAY POST PETITION TAXES, they consider it a new debt. I had 21 days to object to the motion for dimsissal and the only way I got out of it was to pay teh IRS in full before that 21 days was up. HOpe this helps.

[jake]

Thanks for the info. It definitely helps. But short of robbing a bank, I'm not exactly sure how one can pay off an unexpected IRS due bill without acquiring a loan to do it in such cases as mine.

I'll have to talk to my attorney to see if there are any options such as suspending payment for a month or two, but regardless, thanks for the heads up. Hopefully you just have a rather strident and unfair trustee. But I'm sure not counting on mine to be understanding, either.

Again, thanks.

[ruspider]

Yikes!!!
Found this quote in the archives

SAme thing happened to us this year. My suggestion is to pay it up front and don't tell the Trustee. I contacted the IRS Insolvency branch like indicated on one of the IRS extension forms and they said that they would file a post petition claim and that the chapter 13 plan would then pay the taxes, NOT TRUE! Two days after this conversation with the IRS I received a letter from my truestee, it was a MOTION FOR DISMISSAL FOR FAILURE TO PAY POST PETITION TAXES, they consider it a new debt. I had 21 days to object to the motion for dimsissal and the only way I got out of it was to pay teh IRS in full before that 21 days was up. HOpe this helps.

[quietsound]

that's NUTS, how are you suppose to know that you owe taxes! YOu mean to tell me that if a person owes taxes in any given year from the time they file up until 5 years or so depending on the plan they are in, if they owe taxes your case will be dismissed due to owing them and considered new debt? that's nuts! why can't you make a motion to remodify the plan to add the debt to pay the taxes? this is crazy

[lrprn]

Yikes!!! Found this quote in the archives

Be careful what you dig out of the forum archives, ruspider. Since the bankruptcy law changed in Oct 2005, any information posted before Oct 2005 may be incorrect or was modified by the new bk law.

In this case, the IRS states their position on taxes during Ch 13 at http://www.irs.gov/irm/part5/ch17s15.html#d0e194173 :

"

Bottom line....I'm thinking that the archive debtor Klux might have believed that his income tax payment would be handled by the trustee through his bankruptcy estate - not true - and didn't pay his federal taxes or didn't file his federal tax return on time. This may be what caused the non-payment situation. Just because a filer is in Ch 13 doesn't change the need to file tax returns on time and also doesn't change being responsible for paying federal taxes owed on time or arranging a payment plan with the IRS.

Hopefully someone else here knows about the IRS tax situation in Ch 7.

[M900]

I contacted the IRS directly and set up a monthly payment plan I owed taxes2 of the 3 years I was in my Ch.13 plan I owed over 2K and paid them $100 monthly until I refi'd out of my ch. 13 then paid them in full. Contact the IRS they will set up a payment plan they knew I was in a ch.13 cuz they were being paid thru my plan also...good luck