But not nearly as often as the IRS would have you think.
It’s a huge let down to think after all the payments in a Chapter 13, not everything went away. But in a narrow slice of situations, it happens.
If, however, the tax was a non dischargeable tax which was paid in full through the plan, then the IRS is entitled to interest.
That interest covers the period after the filing of the bankruptcy case. Any interest on the tax that accrued before filing is part of the tax claim in the case.
To figure out whether you really owe the interest on tax the IRS now claims, you need to know not just what taxes you paid in the case, but which ones were dischargeable. [Read more…]