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IRS late tax payments

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    IRS late tax payments

    Edit to add this is about post petition tax payments. Our 2018 were paid through the BK13 then we had 2019, 2020 and 2021 taxes that we did not have enough cash to pay when they were due. IRS allows voluntary payments and they have a BK department you can call for more information since they do not list the amount you owe on the website.

    You may have seen my posts about not having enough money to pay the IRS. I had made a bunch of voluntary payments got 2019 paid up and most of 2020 and still owe all of 2021. When our BK was discharged I wasn't sure how the IRS would handle it. I called several times and got differing advice and finally learned as all things with the government it takes time to update the website, etc. Even though we were discharged, and IRS had us marked as discharged I could not get a payment plan since we were still in the computer system BK department not the Collections department. I waited 3 more weeks like one of the nice and knowledgeable, they were all nice, but not all knowledgeable, ladies told me

    FINALLY, we are in collections. Who the heck is happy besides Carmella to be in collections LOL!

    What I found out was we have two options. We can get a monthly payment plan and it would cost an extra $225 to start. Or we can get an extension and have 180 days to pay. That takes us into January. We get penalties/interest, but if we pay nothing until the last day it's only a total of about $90.

    And if for some reason we don't pay within 180 days then they would switch us to a monthly payment arrangement. We plan to pay, but if we really could not at least there's still options. I didn't realize the IRS was so flexible.

    We will make weekly payments to the IRS and we should still be able to build the down payment for my husband's car. I think my plan to get things in order now and then in January we will be ready to have an established budget. All these loose ends should be tied up.

    If you are worried about taxes there is light at the end of the tunnel. Call the BK department and takes notes you can reference later. The BK dept was usually about 30 minute on hold to talk to someone I usually called at 7 a.m.

    If you are married make the voluntary payments under the primary social security number--that was my husband's number since his name is first on the form. I made them under my name and then the payments were just in lala land not being credited to the debt. And it was a hassle to get it corrected. Also DO NOT call on the Friday before a holiday weekend. You don't want the new kid on the block no matter how hard he tries because he is inexperienced, and no one is at work for him to call or transfer your call. I wouldn't call the first weekday after the holiday either!

    The representative at the IRS also encouraged us to us the tax estimator on the IRS website and change our withholding to prevent from owing more taxes. I am not ready to go there yet and deal with that. One thing at a time.
    Last edited by Carmella; 07-23-2022, 02:33 PM.
    I am not an expert. I just share my experiences in the Wonderful Wacky World of Chapter 13! Filed 3-30-18 Confirmed 7-11-18 Discharged 6-8-22

    Carmella, I'm glad you've got a solid plan to get out from under those cruddy IRS back taxes. Hurrah for your upcoming final freedom from drawn-out debt!
    My husband and I have rarely owed because we somehow always seem to overpay, but not this year, LOL!
    We will definitely owe because of the 401K loan that went into default despite our best efforts to pay it on time. The total amount left was only around $2000 thank heavens, so the penalties shouldn't be too much. I suspect though, that because of the salary raise, we may be in a higher tax bracket now and may owe some additional taxes for that higher income as well.
    As for the home sale proceeds, we were assured we will owe no taxes because the house was our sole residence for more than five and a half years and the profit was far less than 500k.
    I hope that none of us who earned our financial liberty this year will ever have to file BK 7/13 again!


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