Clarification - Tax Refund

[rbridge]

I'm nine months into my CH 13 and been reading the issues concerning tax refunds.
I looked at my plan confirmation again and all it states is that I pay my $370 a month for the next 60 months. There is no mention of resubmitting income taxes to the Trustee or any about a refund.

So here's my question does this mean the trustee can never go after my tax refund or ask for my income taxes?

JMG

[newbie2]

What did your attorney tell you?

[Kuya]

Your trustee CAN go after anything he/she wants. Some trustees are much more lenient than others. Some want your blood and some will not worry about tax refunds under a certain amount.

Remember . . . Most trustee do profit a certain percentage from whatever you pay into your plan . . therefore it does make sense that they want all they can get, under the law.

I was lucky in that my trustee did not bother refunds under 5k.

[rbridge]

I understand the Trustee gets a cut but after the plan is confirmed do they have the ability to go after other things like tax refunds not mentioned in the plan.
My attorney did not mention anything about tax refunds

[justbroke]

Your Plan is binding on all parties, including the Trustee and creditors. If it's not in the Plan, then it doesn't exist. If you have a question about your Plan, please review it with your attorney. The Plan should spell out everything in excruciating detail including how your dealing with secured debt, any liens that were stripped, and quite possibly all the claims that are deemed allowed.

justbroke's side note: In many Districts, the debtor (or his/her attorney) is required to calculated the disposable mopthly income (DMI) by accounting for tax overpayments and underpayments. This is usually done by taking your average tax refund/payment from the previous 3 years, dividing it by 12, and adding that to your 6-month look-back income. This adds any average refund, as a monthly amount, into your income, so that the Trustee doesn't need your refund. However, your Plan may require that you provide your tax return each year so that the Trustee can evaluate your actual earnings. If the Plan neither requires to submit tax returns nor surrender tax refunds, then you do not need to do so.

[tigergem]

My plan quite clearly specifies, in unmistakable language designed and designated by the Trustee himself, that I have to provide him with a copy of my income tax returns every year AND he gets my income tax refund. As justbroke stated, if it's not in there, then it doesn't exist! Lucky you! Normally I don't have enough of a refund to quibble about, but this year, I received some unexpected tax credits, so I asked the court if I could retain my refund. My Trustee made a comment that he has no objection to my request (bless his heart!) but he did, however, comment that he believes I should have made the request via a plan modification rather than by motion. I'm just waiting to see what the judge decides on that. If I have to modify my plan, I will, and then I guess I will just have to wait longer for my refund (which I have learned has already been addressed to the Trustee by the IRS because of the language in my Plan).

[jetsfan2010]

I think mine says something along the lines that I have to submit tax returns each year as well. Gotta appt to drop those docs off next week lol

[junquemayle]

Ok. I just got nervous, because tax returns/refunds never came up. I reviewed both my plan documents and the confirmation order, and found nothing that mentions tax returns or tax refunds anywhere. It does mention/include bonuses, so I would assume that would be the section where it would be included. In any case, I read through the entire plan. Looks like I am one of the lucky ones...

[bpokey]

Yeah, mine didn't say anything about tax returns or refunds either.

[jetsfan2010]

if in doubt, ask your attorney.

[justbroke]

if in doubt, ask your attorney.

This is true about almost everything in bankruptcy!

[kornellred]

rbridge - The issue of tax returns and Chapter 13 seems to be both one of the most illogical and most talked about in this forum. From what I have gathered, the situation is all over the place. Some trustees insist on an ongoing examination of the debtor's resources for specific reasons. Other trustees insist on the submission of tax returns from all debtors for the duration of the payment plan. And still other trustees do not require any tax return reporting, at least from run-of-the-mill debtors whose financial situations are not likely to change that much (mostly everybody).
I have yet to read a posting where someone states that their trustee asked for a tax return out of the blue, late in the game. Everything that a debtor is required to do is spelled out in the Chapter 13 plan confirmation document from the bankruptcy court. The trustee would have to have the tax return reporting requirement included in the plan confirmation in order for it to be effective.
A real good way to make this a non-issue would be to adjust your withholding to minimize or perhaps eliminate any overpayment.

[99lawdog99]

Just be careful about the fact that if it isn't in the confirmation order you don't have to provide it. I don't do bankruptcy but I had a client who filed pro se and ask me if he had to provide the trustee his yearly tax return when I was doing other work for him. My answer is always that I don't do bankruptcy so take what I say with caution, but I said if the order doesn't require it , you usually don't have to do it. A few months later he called and told me his trustee was going to kick him out of his plan for not providing his return. Apparently he forgot to tell me that he received a letter from the trustee asking for the return. So in conclusion even if it is not in your order, the trustee always has the right to request it and then you have to provide it.