Question: I owe $1400.00 to the IRS and am making payments. My 2010 tax return is expected to be $1800.00. I understand that taxes owed can be paid in Chapter 13 but if the tax return comes after the Chapter 13 is confirmed will they take just the $1400.00 owed or my whole return?
The trustee may or may not release a portion or all of the refund, once your case is assessed. If there is no IRS debt plan included in your active Chapter 13 bankruptcy case, you stand a chance of receiving part or all of the refund from the trustee – but the specifics of your situation will have some influence on the decision.
Be sure to seek your attorney’s advice before you take any action.
John Engerman is a CPA based in the Washington D.C Metro area. he is the founder of aRI Financial Solutions, LLC