Post-petition IRS Debt

In a Chapter 13, IRS debt must get paid in the bankruptcy unless the Debtor has already made arrangements to pay them directly to the IRS and are current on the payments to the IRS under that arrangement. IRS debt for taxes filed after the bankruptcy must also get paid when it comes due, or the IRS can force the Debtor to put it in the bankruptcy.

I have a client whose husband did not file bankruptcy with her. He paid the taxes that were included in the Debtor’s Chapter 13 bankruptcy. We received a call from our client explaining she wanted to close out her bankruptcy because all that was being paid was IRS taxes from 2003 that have been paid in full by her husband. Debtor knows those taxes have been paid in full because she received an offset letter explaining that the money received from the Trustee was put towards her 2005 taxes that were due.

I told the Debtor that since she is due for 2005 & 2006 taxes, the IRS will not allow us to file a modification to close out her bankruptcy. They will either want her to continue the way it is (which she has 6 months left), pay the 2005 & 2006 in her bankruptcy, or they will file a motion to dismiss since she has not been paying her post-petition taxes.

Debtor is upset and doesn’t think she should have to stay in the bankruptcy and claimed the taxes owed were her husband’s debt. However, since her and her husband filed joint tax returns, she is just as responsible as he is.

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