Chapter 7 and Federal Taxes

[BarkingCat]

Actually, your installment agreement should be a non-issue, and yes, you can include it in BOTH the means test and schedule J. In fact, if your current Installment agreement is longer than 60 months (not likely, but if), you can raise the expense amount on the means test and schedule J because that is the amount you would need to pay in a chapter 13.

Can you include your installment agreement amount in the means test and schedule J only if the taxes are not dischargeable? I'm currently in an IRS installment agreement and all the taxes would be eligible for discharge in BK.

Thanks!

[HHM]

Can you include your installment agreement amount in the means test and schedule J only if the taxes are not dischargeable? I'm currently in an IRS installment agreement and all the taxes would be eligible for discharge in BK.

Thanks!

If the taxes are dischargeable, then no.

[scla]

Most attorneys that will look into if your taxes can be discharged will have you request an MFTRA-X from the IRS for each year that the taxes are owed. This will help the attorney determine whether the taxes meet the necessary requirements to be discharged in bankruptcy. The tax lien on your property from taxes owed can be dealt with in different ways depending on the Chapter of bankruptcy being filed. [URL deleted)

[dawntyoung]

Will they be discharged

Hi Everyone,
I have read everyone's comments and thank you all for the advice. I am going to be filing tomorrow for Chapter 7 BK.

I have back taxes that I owe: $325.09 from 2007. Do you think that I will have to repay that once I receive a discharge? I am unemployed and can just barely pay rent and my cell phone bill monthly.

Any advice you can give me would be much appreciated!

Thx!

[HHM]

Hi Everyone,
I have read everyone's comments and thank you all for the advice. I am going to be filing tomorrow for Chapter 7 BK.

I have back taxes that I owe: $325.09 from 2007. Do you think that I will have to repay that once I receive a discharge? I am unemployed and can just barely pay rent and my cell phone bill monthly.

Any advice you can give me would be much appreciated!

Thx!

Well, if your question is, will those taxes be discharged in BK, the answer is no. It hasn't been 3 years since the tax return was due (for tax year 2007, the tax return due date is April 16, 2008).

[dawntyoung]

@ HHM thanks for the info!!!

[toofastkx]

im actually going to file for ch7 soon. I owe taxes from an audit for 2006 and 2007. the IRS levied a lien on my foreclosed property. the property went to auction 2 months back. I received the IRS lien on the property last week. How do I tackle this before filing? thanks for the help.

[chazdiezal]

Hi folks, I owe back taxes from 2000 and 2001 and in the process of preparing for chapter 7. The IRS has not filed a tax lien yet as I was paying on an installment agreement but stopped a few months ago. Do I include these taxes on the schedule E as an unsecured priority claim?
Thanks

[biotechsolution]

you include them has unsecured, non-priority if they are able to be discharged. The longer you wait to file chapter 7 the more time you give the IRS to file the lien. THe lien will pass through the chapter 7 even
though the taxes can be discharged. It can be collected against anything you have, including retirement accounts.

[dawntyoung]

I am to receive a refund for college. I was wondering since the taxes will not be discharged should I pay them with my refund? Also, I have a speeding ticket- should I pay that as well?

[techguy74]

Well, I never thought that I would be here, but here I am. I am on very close to filing for bankruptcy and have a tax lien attached to the house. To make a long story short, my ex and I split and I am paying 3100 a month in child support. Since I owed back taxes, the IRS put a lien on the house. The house has been foreclosed upon and I am getting ready to move out. All taxes were filed more than 3 years ago.. The house value has dropped 70k since I purchased it in 2006.

My question, if I pass the means test, would I be able to discharge the tax debt attached to the house. Should I notify the bank of this tax lien or do they already know about it.

I really need to do the right thing here for my girls, since I am throwing all my income towards trying to catch up with bills. If I am to move out soon, I need to stop paying bills immediately so that I may find an apartment.

[wystanfi]

The information you share is really good.

[clickman]

DISCHARGING IRS DEBT AND LIEN WILL THIS WORK?

I am aware that back income taxes can be discharged in BR if they meet the criteria (at least 3 years since were filed, etc.). I am confused however as to where the debts should be listed in my filing forms.

Some details on my case; I will be filing Chapter 7 BR - the IRS has Liens filed on me for the sums owed ($62,000)

Some specific questions;
1. On Schedule E - "Unsecured Priority Claims" there is a checkbox for "Taxes and Certain Other Debts Owed to Governmental Units" I need to check that box, correct?
2. Most of the information I have been reading says that back IRS taxes that meet the criteria should be listed in Schedule F - UNSECURED NONPRIORITY CLAIMS. Is that correct or should I list them in Schedule E - UNSECURED PRIORITY CLAIMS?
A bit confusing to say the least.

I have ordered my MFTRA-X reports from the IRS to fully document exactly when the various tax returns were filed. Here is my plan of action, please tell me if I am on the right track or not.

1. I receive documentation (MFTRA-X reports) from the IRS showing that the debts do meet the criteria for discharge.
2. I list the debt(s) in my BR petition (again - where exactly)?
3. I owe $189,000 on my home. Using the online real estate home appraisal sites, they show a market value of from $176,000 to $195,000. This would show me from 0 equity to a high of around $6,000 equity.
4. I pay for a professional appraisal of my property that shows somewhere between 0 equity and $6,000 in equity.
5. I now have documented proof from the IRS that all my back taxes are more than 3 years since filed, and I have a professional appraisal showing little or no equity in my home which is my ONLY asset.

Please correct me if I am wrong, but armed with a professional appraisal and proof that the various years of back taxes are dischargeable, I should be able to go to a BR attorney and for a nominal fee have him draw up the proper "Motion to Determine Value of Lien" to be filed with my BR which hopefully would strip all or nearly all of the Liens now filed against me (I am assuming that if my appraisal shows for example $6,000 in equity, the Liens would drop from the $62,000 now recorded to $6,000. Correct?)

Again, filing Chapter 7. Any problems you see in my plan? Thanks for your help!

[BKorbust]

I could be wrong but I thought you couldn't strip tax liens. Anyone?

[ValleYum]

@clickman

Do pay for an appraisal or CMA - the online real estate home appraisal sites are notorious for being off the mark. Our CMA (done by the area's short sale guru) was 20k less than Zillow, etc.

Good luck with the tax liens! I am sure someone will chime in with info for you.