Tax question

[DUMBAGAIN]

When you owe back taxes that will be placed in your plan of course, does the penalties and interest stop?

Also, since I went to see the lawyer org. in Oct and we have not filed yet, I have an appt Monday. I just want to make sure I have all the figures correct.

[car67]

The way i understand the tax issue....
Penalty and interest is discharged at end of 13
if there is no discretionary income to cover these?

[DUMBAGAIN]

Thanks, what does "No discretionary income" mean.

Also, I forgot to ask if you rent, how is rent increases in the future some into play with the plan?

[car67]

What I am saying if you get rich again sometime during the 5 year plan you may have extra money to pay penalties and interest......

The tax bill without interest and penalties is a priority debt
it must get paid first along with the attorney via the plan payments

The interest and penalties are non secured debt and not a priority debt.
Which means the tax bill gets grouped in with other debt in the plan and everyone
gets a percentage set by your plan

[car67]

Rent payment increase can be dealt with an amended plan to change your payments at the time..... If your rent decreases although then you got more free income to pay past debt... See how it works?

[DUMBAGAIN]

got it thanks!

[krielly]

Tax debt is split as follows in Chapter 13:

Principal & Interest = Priority Debt - IRS will be paid back at 100%
Penalties = unsecured debt - IRS will be paid the same percentgage as your other unsecured creditors per your plan.

So.......If you owe the IRS $1500, plus interest of 150, plus penalties of $200, your total is $1850.

The IRS will file a claim as follows:
Secured: 1650 - paid at 100%
Unsecured: $200 - paid at xx%

K