IRS tips for bankruptcy trustees

Claim payments

If you are mailing claim payments:

• Internal Revenue Service
  Centralized Insolvency Operation
  P. O. Box  7317
  Philadelphia, PA 19101- 7317

• Send payments for Chapter 11 (including cases meeting the requirements of the Small Business Reorganization Act), 12, and 15 to the local Field office assigned to the case.  This address can be located on the proof of claim. If you are unsure of which office to send your payment to, call Central Insolvency Operation (CIO) at 800-973-0424 for assistance.

• Chapter 13 Bankruptcy Trustees can use EFTPS®, the Electronic Federal Tax Payment System, to submit claim payments to the IRS. EFTPS is the preferred method for the IRS to receive claim payments from Chapter 13 Trustees.
  • EFTPS® is a:
    • Free service provided by U.S. Department of Treasury
    • Secure process
    • Preferred method for Trustees to submit claim payments electronically to the IRS (with a special registration process)
    • Quick, easy, and accurate way to send claim payments to the IRS
       
  • Advantages of using EFTPS®:
    • Reduce Identity Theft
    • Save on postage and paper costs
    • Eliminate human errors
    • Streamline business processes, and more
       
  • Steps to get started making payments using EFTPS®:
    1. Chapter 13 Bankruptcy Trustees submit completed Form 14781, Electronic Federal Tax Payment System (EFTPS) Insolvency Registration PDF.
    2. Receive EFTPS® registration number (Trustee ID).

Work with software provider and bank to set up the electronic funds transfer for making EFTPS claim payments via ACH.

IRS collection notices

Here are some helpful tips for bankruptcy trustees who receive IRS Collection notices:

• If the IRS is a creditor in a bankruptcy case, and you determine that IRS was not originally listed as a creditor, notification of the filing should be sent to IRS to prevent violations of the automatic stay. Send notification to:
   

  Internal Revenue Service
  Centralized Insolvency Operation
  P. O. Box 7346
  Philadelphia, PA 19101-7346

• IRS notices are sent to the last known address. This address is determined by the most recently filed tax return, Form 8822, Change of Address or change of address information obtained from the United States Postal Service. As an official National Change of Address licensee of the USPS, the IRS receives weekly updates of change of address information.
• Bankruptcy does not prohibit issuance of all IRS notices, and not all IRS notices violate the automatic stay. Some notices, for example inquiries concerning unfiled returns, will continue to be sent to the debtor’s last known address.

• For individual debtors, the last known address should always remain the debtor’s address. Returns should not be filed “in care of” the trustee. Doing so will change the debtor’s address to that of the trustee and all IRS correspondence relating to that taxpayer will be sent to the trustee.

• In cases not involving an individual debtor, the debtor’s IRS address of record will be changed to the trustee’s address if the trustee:
   
  • Files a debtor’s tax return in care of the trustee at the trustee’s address, or
  • Files a change of address for the debtor with the USPS, or
  • Files a Form 8822, Change of Address, with the IRS.
     

    Any of the above will result in all future IRS correspondence being sent to the trustee.

    Treas. Reg. §301.6212-2 and Rev. Proc. 2010-16, provide guidance on the procedures for making a change of address and explain the requirements for giving the IRS “clear and concise notification” of a change of address.
     

• IRS notices concerning taxes incurred by bankruptcy estates of individuals in chapter 7 and 11 cases, which file separate Form 1041 returns, are properly sent to the bankruptcy trustee. Notices will continue to be sent until the liability is satisfied or the statute of limitations for collection expires.

• The Internal Revenue Service Revenue Procedures 2006-24 and 2010-27 outline the procedures for trustees to obtaining a prompt determination of any unpaid tax liability of the estate and to request a prompt refund, respectively. Section 3 of the revenue procedures provides require trustees to mail prompt determination and prompt refund packages to the Centralized Insolvency Operation address listed above. While trustees can still mail prompts, the IRS preferred method to receive the prompts is now via the fax number 844-250-2035. This fax number is only for prompt packages. No other items should be faxed to that number.

• Certain penalties may apply to returns filed by the trustee for taxes owed by the bankruptcy estate. The penalties may be waived if the Bankruptcy Court finds there are insufficient funds to pay administrative expenses. Contact the Centralized Insolvency Operation at the phone number below if you believe any of the penalties should be waived.

• If you have questions regarding a case where IRS is listed as a creditor, contact the Centralized Insolvency Operation. Be prepared to provide the debtor's bankruptcy case number or taxpayer identification number. The IRS may only disclose the information permitted by I.R.C. section 6103.

• Call 800-973-0424 to reach the Centralized Insolvency Operation. Hours are 7 a.m. to 10 p.m. eastern time.