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cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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IRS continues to add interest on an account Bankrupsy

Customer Question

How is it that the IRS can continue to add interest on an account without any notice because you have entered into bankruptsy? I recieved a notice stating that I owed $205.78 at the end of December 2005. I filed bankrupsy in August of 2006. The interest accrued an amount of $937.54. This seems so unfair not to be notified. Can the IRS do this to me?


 


 

Submitted: 3 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 3 years ago.

Hi JACustomer,

1) Was the tax debt discharged in the 2006 Bankruptcy? (Because a debt is listed in a Bankruptcy does not mean it is discharged.)

2) If you are not sure if the tax debt was discharged:

a) What type of tax was owed?

b) What tax year was the tax for?

Customer: replied 3 years ago.

 

The bankruptcy was filed 8/23/2006 and confirmed on 11/17/2006. The discharge was completed on 12/22/2010. I have two bills they are as follows:

 

Notice of seize property or rights to properly : Notice Date: 04/25/2011 Tax year ending December 31,2005.

Amount Owed: $205.78

Interest charges: $937.54

Total Amount Due: $1,143.32

 

Due Date: May 5, 2011

 

I have also received another notice for the Tax year ending December 31,2006

 

Amount owed: $351.26

Failure-to pay penalty $351.26

Interest Charges $383.87

 

Total amount due: $2,223.35

 

Date of Notice: April 25, 2011

Due May 5, 2011

 

 

These were the only notices of tax delicacy I received. I called and questioned why I was not contacted prior to April 25, 2011. The response was that due to the my bankruptcy status, procedure was not to send out notices to avoid duress and stress to the person filing bankruptcy. Well, I am truly panicked and extremely stressed out. Both amounts could have been paid a long time ago if I would have known that past money was owed.

 

 

I look forward to your response. Janice Price
Expert:  cfortunato replied 3 years ago.

Those taxes might not have been dischargeable. If not, they would still be owed after the Bankruptcy was closed - if not paid in full in the Bankruptcy.

What type of taxes were those? Income tax? Property tax? Something else?

Customer: replied 3 years ago.
Income taxes.
Customer: replied 3 years ago.
Is there a way to dispute the amount of interest incurred? If so who do I complain too?
Expert:  cfortunato replied 3 years ago.

Income taxes that are due within 3 years of a Bankruptcy filing are not dischargeable. Those taxes were not dischargeable, and that is the reason for the added interest and penalties, which the IRS can add for that reason.

Your question is in the Bankruptcy Law section. I am a Bankruptcy Law expert, and do not know how to dispute interest on income taxes. Perhaps you can ask the last question in the Tax section.

Customer: replied 3 years ago.
Relist: Incomplete answer.
The attorney asked me to perhaps to ask an attorney in tax law to give me the ans my question completely.
Expert:  cfortunato replied 3 years ago.
You can't get an answer to a Tax question in the Bankrutpcy Law section. That is the reason I suggested you ask your Tax question in the Tax section.

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