Tax Bill received after Filing 13....What to do?

[BK09]

We recently filed in early April and 341 is scheduled for this Friday. Prior to filing I called IRS to make sure our taxes were paid - IRS said we were paid up, so I did not inlcude them on the debt information submitted to the attorney.

Last week I received a bill from the IRS for $880 on taxes owed. It turns out I do owe the tax, so I called the attorney and she is saying to setup payment plan with IRS and pay outside of plan. I don't have a problem doing this, but will this jeopardize our Chap 13 plan at all?

Anyone with experience with this please reply...........I'm calling the IRS tomorrow - I will report back to you what the taxman sayeth. Thanks.

[lrprn]

We recently filed in early April and 341 is scheduled for this Friday. Prior to filing I called IRS to make sure our taxes were paid - IRS said we were paid up, so I did not inlcude them on the debt information submitted to the attorney. Last week I received a bill from the IRS for $880 on taxes owed. It turns out I do owe the tax...

It's a shame you didn't wait to file until late April - the six-month lookback would have been the same and you might have received the tax bill before the end of April and be able to include it in your plan. Any ideas why the IRS said before filing you didn't owe tax, but then found you owe $880 in taxes now?

so I called the attorney and she is saying to setup payment plan with IRS and pay outside of plan. I don't have a problem doing this, but will this jeopardize our Chap 13 plan at all?

Because the tax bill arrived after you filed, you can't include it in your Ch 13. You have to pay it on your own, just like any new debt that comes along after filing. This won't jeopardize your Ch 13 plan at all because the tax bill has no relationship to your Ch 13 debts.

The tax bill will, however, stretch your limited post-filing finances because most Ch 13 plans leave very little (if any) extra income left over to pay the taxes, especially for the first 6-12 months after filing.

[Flamingo]

We filed in 2002. In 2005, 3 years into our plan, we ended up owing $1500 to the IRS for tax year 2004 due to funds received from a former employer (company) that went bankrupt shortly after we filed for owed sick and vacation time. We called our attorney and we were advised to contact the IRS to set up a payment plan and have them work with us so we could pay something we could afford since we were in Chapter 13. You will do the same. As long as you do not have any former taxes included in your Chapter 13 filing, you will be able to pay off taxes due and owed after your filing via a payment plan with the IRS. If you have former taxes included in your Plan, the IRS will not allow "two" payments plans (they consider Chapter 13 to be a payment plan). and you will have to voluntarily send in whatever you can and you will be responsible for interest any penalties until paid in full. It sounds like you don't have that issue to worry about.

We waited to file until mid-April 2002 because we estimated we would owe taxes and we did due to us increasing our exemptions from zero to 3 way prior to filing to free up money and having lower than usual tax deductable items for Schedule A due to spending cutbacks, etc.

[BK09]

Thanks for the replies. I should've included in plan b/c I thought there was a possibility. Anyhow, I am going to set up payment plan with IRS...........they said I could do automatic withdrawl over 36 months. I'll pay the $25 per month for 3 years and add any extra that I can over that period. Thanks again for the information.

[krielly]

What is the time period for which the taxes are due? If they are due for a period prior to your filing date, I see no reason why they can't be included in your plan. At a minimum, whatever percentage of that debt was due at the time of filing should be able to be included in your BK.

It makes more sense to amend your plan to include them than it does to pay them outside of the plan. They will be a priority debt inside your plan, and it will not cost you additional money per month to pay them. It simply means your unsecured creditors will get a smaller percentage of payback.

I don't get why your attorney doesn't simply file an amendment to add the IRS to your schedules. You haven't been confirmed yet, so this would only involve filing an amendment, not a modification of your plan. It's pretty simple, actually...........

K

[BK09]

thanks Kreilly....................I just sent the paralegal an email and will hit up the attorney on Friday at our 341. I'll keep you posted.............this board is a life saver along with a strong faith.

[BK09]

update

Posed this question to the paralegal, "....is it not possible for this 2007 tax debt to added to the Chapter 13 plan?"

Got this reply, "Mr. _______ Debt incurred prior to bk filing cannot be added into plan."

Does this sound right..........any help will be appreciated. Thanks.

[krielly]

No, it DOESN'T Sound right at all.

If you can't include Debt incurred prior to filing, then what the heck exactly are you including...........????????????????????????????

You should talk to the lawyer..... not the paralegal.

Debt you owe from 2007 is definitely ok to include. What kind of a whack job would make that statement?????

UGH!!!!!
K

[BK09]

My personal opinion is that the paralegal doesn't want to fool with it. Meeting with the attorney tomorrow at the 341 meeting. I'll keep you posted.