# Back taxes in bankruptcy and current refund



## Cherry (Sep 23, 2009)

As of Feb 8, I filed individual bankruptcy. In this bankruptcy, I had 2010 individual back taxes added to the Ch 13 plan repayment. My plan paperwork states that any refunds during my Ch 13 will remain ours and not be taken by the trustee. 

Now... We are due a refund for 2011 taxes when we file. My BR case is filed with the courts, my creditors have been notified and my next step is the meeting of the creditors which takes places end of March. 

My question: If my H and I were to file joint taxes now, would the IRS take any refund due and apply it to my individual back taxes since I just filed for BR? Or do they already know that my back taxes are being paid back with my BR plan?

Thanks for any thoughts on this. We can wait until after my meeting of the creditors to file taxes, but just wanted to know what might happen now if we filed.


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## GreenEyes (Jan 27, 2011)

If the back taxes were included in BK, they shouldn't be taking any current refunds and applying it to those amounts; however, it's been done before and then the POC filed by the IRS or state agency, was amended to reflect the amount applied to the back taxes.....It all just kind of depends since the BK is so new....


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## Cherry (Sep 23, 2009)

^^^ That's what I was thinking. With the meeting happening in March, we will probably hold off on filing until we everything has been confirmed. Thank you!


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## GreenEyes (Jan 27, 2011)

Yeah you will be able to ask questions and find out everything you need to know at that meeting, If anything make a list of questions, kinda like going to the doctor haha, because some people get in there and just get so nervous and forget half the stuff they wanted to ask.


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## SunnyT (Jun 22, 2011)

The IRS can take whatever they want...and then say OOPS. Btdt. Wait.


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## Ilovemyhubby (Feb 21, 2012)

wait you can file an extension if you need to. The bankruptcy trustee can take you return. you can always have your spouse when you fle together file injured spouse on your return and get half the money at least. Injured spouse is a way to get half the money.


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## Cherry (Sep 23, 2009)

SunnyT said:


> The IRS can take whatever they want...and then say OOPS. Btdt. Wait.


Yes, that's what I'm reading about. When I filed BR, there is an automatic stay. However, there are questions re: the IRS and seems sometimes they don't play by the rules. 

It would just suck if they took the return because my back taxes (2010) are already rolled up in the plan repayment, if they take this return, it throws my proposed plan off and my BR attorney would have to resubmit. I might plan for an extension just to make sure the IRS is fully informed of my BR status (after confirmation hearing).


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## GreenEyes (Jan 27, 2011)

Cherry said:


> Yes, that's what I'm reading about. When I filed BR, there is an automatic stay. However, there are questions re: the IRS and seems sometimes they don't play by the rules.
> 
> It would just suck if they took the return because my back taxes (2010) are already rolled up in the plan repayment, if they take this return, it throws my proposed plan off and my BR attorney would have to resubmit. I might plan for an extension just to make sure the IRS is fully informed of my BR status (after confirmation hearing).


It wouldn't necessarily throw your Plan off or anything, it would lower the amount you have to pay back to the IRS is all. Usually your Plan provides for tax refunds too, as in you keep the first, for us it's $750, and then the rest goes to the Trustee to pay your unsecured creditors. Also, in that instance your attorney shouldn't have to resubmit another Plan, he/she should be able to just do an Immaterial Modification with the Trustee if any adjustments need to be made....

The IRS and Bankruptcy Courts are both governed by federal law so the IRS usually plays by the rules in this case....


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## Cherry (Sep 23, 2009)

^^^ Thanks.... Just been reading the horror stories and got concerned. A reminder to myself: Don't believe everything you read, right? lol


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## GreenEyes (Jan 27, 2011)

Cherry said:


> ^^^ Thanks.... Just been reading the horror stories and got concerned. A reminder to myself: Don't believe everything you read, right? lol


Exactly haha Not saying mistakes don't happen, but most things are fixable and not a huge deal. But then when you aren't familiar with how things work I know it can be a freakish thing, if I didn't work with it, I wouldn't understand any of it!!!!


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## DTO (Dec 18, 2011)

To avoid this problem, adjust your withholding to allow for only a small refund.


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