Got a Tax Due (Penalty for 2012) letter

[positive]

I have received State Tax Due (Penalty for 2012) letter (It is a collection letter). It is about $800. The Bar Date has been passed and my CH13 case was confirmed 5 month ago. What is best option to handle this situation?

1) Pay the penalty to the State that issued the letter and settle it?
2) Talk to attorney and see if it can be added to the current plan. Does this require a plan change and reconfirmation?
3) Are there any other options

Please advice?

[andy158]

Definitely talk to your lawyer about this. Any debt that occurs after filing is usually your responsibility. But there may be an exception with previous year tax debt. Sounds like you got blindsided with a surprise bill. Worst case scenario; set up a payment plan for a year and pay it off.

[spidge]

If you are early in your ch13 plan then I suggest adding to the plan, but only your attorney can determine if that is possible. This might reduce any further penalties and make it easier for you to manage the pay off. Otherwise you may be tempted to allow it to linger causing more complications in the future.

[plateump]

I agree with Andy158 and Spidge. Definitely talk to your attorney. That's why you have one. The earlier in the plan you are, the better your chances of the court agreeing to some modification. But, that is no guarantee. My experiences with tax debt are that the IRS tends to want to make a deal, but State Tax authorities tend to be less accommodating. I ran a business in the Commonwealth of PA for over 10 years. Never had much of a problem 'making up' with the IRS, but the state tax bureau was not kind. You can make it up in monthly payments, but the earlier you seek a solution, the better.

The WORST thing to do is ignore it ... followed by not talking to your attorney.

GOOD LUCK to you!

[isabella]

I had the exact issue, a surprise letter saying I owed back taxes due to a filing error. I was about a year into a 60 month plan. I took it to my attorney and my plan was modified a about $18 a month, the earlier you get it taken care of the better. DO NOT PAY IT YOURSELF, it can be looked at as a preferential payment when you have other creditirs, let your attorney handle it.