Talk to me about repaying back taxes.

[abomgardner417]

My dh owes back taxes. Please no flames here, I'm already about as disgusted with him as I can get and he feels bad enough.
So does anyone have experience with this? Here's our situation:

DH filed bankruptcy that was final this past Feb. The lawyer (who also did our taxes and who now conveniently quit the law firm) said the taxes would be discharged and he filed our return joint after I asked him to file separate. So now the IRS says dh did not file 2003-2005 (which he did, he just didn't pay) and they are holding our 2007 return. They say they will calculate them for him and use our refund towards what he owes. He owes quit a bit so we will get no refund and I'm assuming they will keep our stimulus checks as well.

So what's our best course of action? Can we send in the returns that he did file and then ammend the 2007 return and file separate so I at least get something? Or should we just send in the previous returns and let them take everything and put it towards what he owes?

My next question is how does the IRS handle repayment if you absolutely cannot pay it. If anyone looked at our finances, they could see how bad off we are, but do they even take hardship into account? There is no way we can handle another monthly payment of something and we have cut everything down to bare bones. We know it's owed and are not trying to avoid paying it...there's just no blood to squeeze from the turnip!

Sorry this is so long, but I am so overwhelmed and would greatly appreciate any advice anybody has. Thanks!

[shayinme]

I am getting ready to head to bed, but first thing is relax. As long as you are open and honest the IRS will work with you, I have been dealing with them for several years as far as back taxes. How much do you owe? The amount you owe IMO greatly determines how they deal with you. I will be back in the AM.

I did want to say though that generally speaking if you owe anything you will not get a refund. The thing is if he didn't file for several years you are looking at penalties and interest on each of those years and their interest rates are pretty bad. More later.


Shay

[abomgardner417]

Thanks Shay! I'll pm you the amount because it's too embarassing to post! Just hearing that they'll will work with you helps me chill out a little.

[zersha]

You could file an injured spouse form for your portion of the refund & stimulus.

[jlutgendorf]

My partner is also paying off back taxes (from when he started being self employed).

We've had our refund and stimulus going straight to it to pay it down (didn't have a choice, but that's what i want anyway).

The best thing to do is to stay calm and get in touch with the IRS right away. My partner called them as soon as he realized we couldn't pay off the entire amount owed and they have been very nice and worked with him, setting up a payment plan. I'm not sure how it was determined, but we've been chipping away at it slowly.

They may also want to hear about your attorney. Something doesn't sound right about what he did for you. Have you talked to the law firm he used to work for?



~Julia

[abomgardner417]

Bumping up...hoping someone has some more advice cause we're pretty
lost .

[shayinme]

I only have a quick second (by the way I did get your PM) for starters, until the IRS assesses each year along with the penalties and interest, you really cannot do much yet. Yes, you can get a tax attorney but my guess is based off the figure you told me, it may not be worth it, what you are estimating you owe is really small potatoes by IRS standards. Its small enough that once you get the final fugures from the IRS you can set up a payment plan online or through their automated phone system. That said, unless you take another posters advice and file an injured spouse form amd I don't know anything about that, that you won't be seeing either a tax refund or a stimulus payment.

Like another poster stated, if you owe them anything you do not have the option of getting the refund/stimulus or not, they automatically keep it and will send you a letter letting you know.

By the way your dh may want to check back with his attorney, I do know that as far as BK and back taxes there are very specific guidelines. I am confused to as why an attorney would have been doing your taxes? Honestly that attorney sounds fishy, you may need to talk with someone at that firm. I do know though that in order to out taxes on a BK, you must file and the taxes must be at least 3 years old, no newer taxes. If you go on the IRS website you can find a lot of this info or do a google search on BK and back taxes.

Gotta run.

Shay

[Lucy van Pelt]

Hi. My husband owed nearly 30K in back taxes when we got married in 2004. We never saw any of our tax refunds and we were even audited during the repayment period. It took 3 years, but it, along with all our other debt, is paid off. I have never heard of an injured spouse claim, but it seems there is little reason to try to get some cash from the IRS if you will still have to pay them back (not sure how much you owe them). And that's the thing: it's the IRS, they expect you to pay them back, however long it takes. But please be encouraged; we owed so much money I never thought we would get out from under but we did, and we are much more confident in our financial decision making, knowing that we weathered this mess.

[BellaLuna Rayne]

Just a quick FYI, injured spouse is for things like child support arrears. You most likely need to file Innocent Spouse.

[abomgardner417]

Originally Posted by jlutgendorf

My partner is also paying off back taxes (from when he started being self employed).

We've had our refund and stimulus going straight to it to pay it down (didn't have a choice, but that's what i want anyway).

The best thing to do is to stay calm and get in touch with the IRS right away. My partner called them as soon as he realized we couldn't pay off the entire amount owed and they have been very nice and worked with him, setting up a payment plan. I'm not sure how it was determined, but we've been chipping away at it slowly.

They may also want to hear about your attorney. Something doesn't sound right about what he did for you. Have you talked to the law firm he used to work for?



~Julia

Originally Posted by shayinme

I only have a quick second (by the way I did get your PM) for starters, until the IRS assesses each year along with the penalties and interest, you really cannot do much yet. Yes, you can get a tax attorney but my guess is based off the figure you told me, it may not be worth it, what you are estimating you owe is really small potatoes by IRS standards. Its small enough that once you get the final fugures from the IRS you can set up a payment plan online or through their automated phone system. That said, unless you take another posters advice and file an injured spouse form amd I don't know anything about that, that you won't be seeing either a tax refund or a stimulus payment.

Like another poster stated, if you owe them anything you do not have the option of getting the refund/stimulus or not, they automatically keep it and will send you a letter letting you know.

By the way your dh may want to check back with his attorney, I do know that as far as BK and back taxes there are very specific guidelines. I am confused to as why an attorney would have been doing your taxes? Honestly that attorney sounds fishy, you may need to talk with someone at that firm. I do know though that in order to out taxes on a BK, you must file and the taxes must be at least 3 years old, no newer taxes. If you go on the IRS website you can find a lot of this info or do a google search on BK and back taxes.

Gotta run.

Shay

Thanks guys! The reason we had our lawyer prepare our taxes is that he ran the tax service out of the law firm and we figured that since he did our BK he would know how best to proceed with the taxes - HA, our stupid assumption. Anyway, they've assigned us another lawyer but there's really nothing he can do about any of it now. The 07 taxes are filed and the BK is over and done with. He said taxes are never discharged in a BK.

The problem with a payment plan is that we're already living paycheck to paycheck. We have nothing, we spend nothing, and after rent, utilities, food, and gas are paid we have nothing left. The last thing I can cut out is our internet, which I'm willing to do if it comes down to it. Do they look at your income vs expenses and take any of that into account or do they just say Pay us this much every month or else?

Originally Posted by Lucy van Pelt

Hi. My husband owed nearly 30K in back taxes when we got married in 2004. We never saw any of our tax refunds and we were even audited during the repayment period. It took 3 years, but it, along with all our other debt, is paid off. I have never heard of an injured spouse claim, but it seems there is little reason to try to get some cash from the IRS if you will still have to pay them back (not sure how much you owe them). And that's the thing: it's the IRS, they expect you to pay them back, however long it takes. But please be encouraged; we owed so much money I never thought we would get out from under but we did, and we are much more confident in our financial decision making, knowing that we weathered this mess.

Thank you for this. It's good to know that there's light at the end of the tunnel. We were just so close to paying so much off and actually start saving for a home and not struggling so much anymore. We knew a home after the BK was at least 5 years off or more, but now it seems like we'll never have our own place.

I've decided not to mess with trying to get my portion back. The only reason I wanted it was to pay off medical bills and to pay back food stamps because our monthly payments on these things are putting us deeper in the hole every mo, but I realized the more that goes to the IRS the faster we get them off our backs.

So to those of you who have had payment plans, how much was it a month (if you don't mind sharing)?

[shayinme]

When we started paying them off, we started at $400 a month and then it continued to go up from there. Ours is a different situation, in that the reason we owe is because dh is self employed and the first couple of years we were foolish and didn't set aside the taxes on a quarterly basis. So basically our debt snowballed because after we set up a payment plan, we still had to set aside our regular taxes and bills and before it was all said and done, we owed a lot of money (over 25K). Knowing what I now know, I did not handle the situation very well, basically thinking that if we did a monthly payment we were ok, problem was that the interest and penalties were accruing so even when we started paying more than $400 a month ($600-700) it really was not making a dent to keep pace.

Yes, if you really cannot pay a reasonable amount, they will have you fill out paperwork to look at your income versus expenses. Though knowing what I do know, I would suggest maybe a loan from a relative or even picking up a pt job or a 2nd job to get then taken care of.

By the way taxes can be discharged in a BK but there are very specfic guidelines, though at this point if your BK is discharged, I am guessing that avenue is not open to you. First thing though is just to see exactly how much you will owe after they do the assessments and after they deduct your refund/stimulus.

Shay

[abomgardner417]

Originally Posted by shayinme

When we started paying them off, we started at $400 a month and then it continued to go up from there.
Shay

Holy crap!

JEEZ, I was hoping to hear it was around maybe $50-$100, which would be a struggle. We will have to accumulate cc debt again if it ends up being that much. My dh was self-employed at the time too and just didn't bother to pay them. He's not now and should always get a refund that they can apply to the back taxes in addition to the monthly payment.

None of our relatives even have that much available and dh currently works 15 hour days as is. I had to quit my job because daycare was costing more than I was even bringing home. My only option at this point is to do daycare out of my home.

This is all making my sick to my stomach!

[jlutgendorf]

My partner ended up owing between 3-4 thousand. He told the IRS he was poor and they set his payment at $50 a month. That seemed to be enough to keep ahead of taxes, fees, intrest. We were paying it down SO SLOWLy though. Our refund this year and the stimulus will be a big help.



~Julia

[abomgardner417]

Originally Posted by jlutgendorf

My partner ended up owing between 3-4 thousand. He told the IRS he was poor and they set his payment at $50 a month. That seemed to be enough to keep ahead of taxes, fees, intrest. We were paying it down SO SLOWLy though. Our refund this year and the stimulus will be a big help.



~Julia

Whew! Good to know. That's more the kind of payment I was hoping for. Thanks!

[amyjeans]

I think they would take a $1 if need be.