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Active Ch13, Owe state/federal taxes for years since filing, HELP?

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    Active Ch13, Owe state/federal taxes for years since filing, HELP?

    First of all, I'm posting this for a friend so I apologize for any details I cannot give...

    One spouse filed Ch13 4 years ago, mainly due to IRS debt. The plan is 1 year away from being discharged/closed, 100% payback. Since the filing date, they owe 20k to the IRS for tax years 2007, 2008, 2009 and 2010. They owe a small amount ($5k) to the state for the same tax years.

    As you may be aware, the IRS allows you to pay payments for ONE tax bill at a time. Until this tax bill is paid off, they will not put you on an installment plan. This is where the problem starts. They included previous years tax bills in their initial Ch13 filing. The IRS is refusing to setup a payment plan (outside of the 13) for the 2007-2010 tax bills. They want it now. They are getting more and more hostile with each letter/phone call.

    They are considering withdrawing from their current Ch13 and refiling w/ the new tax debt added in (both spouses filing). This will avoid any late fees/interest/etc., that is currently being added to the bill. However, they will start over w/ a new Ch13 and will be paying the attorney/court fees.

    Can any of you guys/gals give me your opinions/advice on this? I recommended they do NOT pull out of their current plan as they are so close & then get an attorney to start working with the IRS to get a payment plan worked out. But, I have no experience dealing with the IRS and do not know if they will work with them or go right for the throat. Time is critical, they are meeting w/ their Ch13 attorney tomorrow.

    -AA
    Stopped paying CCs 1/10 | Stopped paying mortgages 2/10 | Interviewed attorneys 3/10-5/10 | Retained attorney 5/14/10 | Delivered paperwork to attorney 6/17/10 | Filed Ch7 7/9/10 | 341 8/16/10 | Objection Deadline 10/15/10 | DISCHARGED 10/20/10

    #2
    Amos, it is good they are meeting with their attorney tomorrow. Your friend filed bk because of tax debt, and yet each year in the plan more tax debt accrued. It is mind boggling to me how this happened and why it was not addressed during the first year of their plan. I don't think the IRS is going to be in a forgiving or negotiating mood when the pattern has been so clear for the last 4+ years..
    Filed Chapter 13 02/2006 - Confirmed 05/2006 - Discharged 09/2011
    I'm not an attorney. My replies are merely suggestions or observations, not legal advice. As always, consult with an attorney before making any decisions.

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      #3
      My attorney told me when you have tax debt, the biggest way to get on the sh## list with the trustee and IRS is to actually owe taxes after you filed on them.
      Ch 7 filed 8/15/11 341 9/22/11 Discharge 11/28/11
      The rebuilding begins

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