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Question about Chapter 13 Bankruptcy and IRS Taxes...
Anonymous3 views4 answers
I filed Chapter 13 back in 2013. I have a five-year repayment plan. In the 2013 filing I included a bill from the IRS for $5000. I filed my taxes last year but didn't owe anything, and this year, I owe three-thousand dollars. I am a small business owner. My accountant arranged a repayment plan for me with the IRS. I just made the first payment over the weekend and just got a letter in the mail from the IRS stating that they cannot accept the payment installment plan because I am in bankruptcy. I am very confused. Please advise. Thank you.
More info is needed, but on a basic level, you are not supposed to incur post-petition tax liabilities while you are in Chapter 13. If you have an entity (LLC, Corp) and the entity is what owes the taxes, then the entity should be able to make arrangements without issue. If it is your personal liability, then there is an issue,
There is a mechanism for adding in the post petition debt to the plan, but that has fallen into disfavor. Post petition tax liability could result in a dismissal of your case, so you need to get with your BK attorney to go over your options and reach out to the IRS.
If you are creating new tax liabilities while you are in Chapter 13, the IRS or the Chapter 13 Trustee may consider bringing a motion to dismiss your case. Be careful with post-petition taxes. Find some way to get the post-filing taxes paid, and make certain that you do not owe taxes in future years. Good luck.
Your bankruptcy attorney should ask the IRS to file an amended proof of claim to include the post-petition taxes and then file a modified chapter 13 plan if necessary.
