Tax Refund Question

[chelle]

My husband and I just filed our taxes over the weekend, I made a copy for the TT. My question is, since we have not been confirmed yet, will the trustee intercept our refund or is this something that is done after confirmation? Our percentage payback is about 90%. I understand if it's intercepted but wanted to ask anyway. Thank you for all your support.

[justbroke]

They can't intercept it before confirmation. Now, to build on this interception thing, at least one circuit court has found that due to the sovereign immunity of the IRS, the Trustee has no right to intercept an income tax refund.

Do you know for sure that "your" District uses the interception method?

[chelle]

Not sure, but I am in Florida Middle District.

[justbroke]

Florida doesn't intercept.

[chelle]

Thanks Just Broke. If I receive the refund in the mail, should I contact my attorney to get his thoughts? I just do not want to spend it and then get penalized later. I thought the court could take the refund once we filed.

[justbroke]

Just talk with your attorney. I don't know what to do with tax refunds in an unconfirmed Chapter 13 Plan.

[SMinGA]

What does your plan say about refunds? It varies widely by district, from the posts I've seen here. My district (N. Ga) & plan says the first 3 years goes to the TT. I don't know if that is because I'm below median income & only filing 5 because I can't afford a high enough payment to resolve priority debt in 3 though.

Others have said they only have to turn it or a portion of the refund over if they get a refund over $X where $X varies. Some districts have no interest in the refund at all.

[justbroke]

In general, Florida requires the entire refund to be submitted on a confirmed plan. Since this plan isn't confirmed, it gets interesting.

[chelle]

I just emailed my lawyer and will post his answer...if he answers.

[justbroke]

He'll probably write... blah blah blah... an unconfirmed plan submits all disposable income to the custody and control of the Trustee and plan... blah blah blah.... you are bound by the plan pre-confirmation.... blah blah blah... turn over the check.