Chapter 7 & IRS Question

[Louis]

I realize I'm a little late coming in here, but,..........

The Auditor did explain to us how the IRS flags a tax return for Audit. A certain number of Audits are random. Much like the 1 in 250 BK Audits. Others aren't.

Every line you fill in, every year, gets assigned "points" as the Auditor called it. Over a period of a few years, you establish an average point value on your returns.

Then, say you have an extraordinary year where something, or several things happen. That causes your points value to swing out of the "normal" range. The computer kicks your return out for a Human review.

If the Human decides that your expenses look legit, your return gets passed on. If the Human decides that further documentation is warranted, then you get pinged for an Audit.

So your increased medical expenses were the start of the Audit process. Evidently those $$$'s deductions seemed too extraordinary and the IRS wanted verification. But now you're caught in the whole BK quagmire.

Have you thought about Consulting with a Tax attny?? Get their take on where you stand regarding the deductibility of the Discharged portion of the medical bills??

That is probably what happened in my case. I have always had very large deductions for medical, etc expenses.

I have not contacted a tax attorney because I see no need to at this time. I am waiting for them to finish the audit and since they just sent me a form 872 that I am not going to sign, I should hear something by the end of the year. As I have stated, if I do not like the results, then I will appeal it and go from there.

So, time will tell