2008 Tax Refund

[laurannm]

Since our case discharged and closed 10/08 (no asset case), is it safe to assume that any tax refund we receive for 2008 is ours to keep? Trustee did ask us how much we expected to receive at our 341 and made a note of it (~$5k), but we never heard from him again. Anyone ever had to give up their refund after their case was closed?

We've already adjusted withholdings to minimize our refund.

Thanks!

[AngelinaCat]

I think you are okay since you are almost three months from discharge AND closing.

[BKParalegal]

You may not be ok, as of last month, most Chapter 7 trustees review their cases for potential refunds and depending on your state's exemptions they will send a form letter to the IRS having them send your refund directly to the Chapter 7 Trustee. The Trustee will then decide to keep it or send it on to you. They won't tell you that at your 341, it will just happen.

Good Luck

[laurannm]

You may not be ok, as of last month, most Chapter 7 trustees review their cases for potential refunds and depending on your state's exemptions they will send a form letter to the IRS having them send your refund directly to the Chapter 7 Trustee. The Trustee will then decide to keep it or send it on to you. They won't tell you that at your 341, it will just happen.

Good Luck

Thanks for the info. If this is the case, is it possible that the IRS would have already received this letter, and thus I could call them and check to see if in fact they will be holding on to our refund?

We didn't exempt (even though we had more than enough of the wild card exemption available), but we did disclose it as pro-rated income on the schedule I.

[FloridaGuy]

I was just notified, that we need to give the trustee 2008 taxes, and if any refund she takes it. Just FYI.

[Mi Bankruptcy]

I wonder if they can still take it if we exempted it? We had our 341 today and the trustee did not say a word about it. Here's what we did.


Schedule B
Anticipated 2008 Tax return $6,000

On Schedule C We listed:

We put "Anticipated 2008 Tax Return"
(Husb)11 U.S.C. 522(d)(5) $3,000
(Wife)11 U.S.C 522(d)(5) $3,000

[laurannm]

I was just notified, that we need to give the trustee 2008 taxes, and if any refund she takes it. Just FYI.

Is your case still open though? Ours is closed so I am hoping we are good to go.

[bkchap7filer]

I am with you.....I understand the trustee can take it if he/she wants it, but I wouldn't think they would open a closed case if they hadn't mentioned it before. I also understand they can open a closed case if they want to, but I just would think if you were closed and didn't hear a peep about it while the case was open in terms of them expressing interest then you should be safe. Is this being naive?

[laurannm]

I think you are right. Seems like just about everyone on here were notified ahead of time if the trustee was interested, and if they were, their case was left open until the refund was received and distributed.

I had asked my lawyer about this, and he said the refund is safe

[rickisbroke]

How about the filing process? I was an individual, Chapter 7, no assett case and closed in September. I have been doing my taxes myself with the help of some software. Should I consult a preparer this year or does my bankruptcy have no effect on my return/refund?

[welovedis]

I think you are right. Seems like just about everyone on here were notified ahead of time if the trustee was interested, and if they were, their case was left open until the refund was received and distributed.

I had asked my lawyer about this, and he said the refund is safe

I asked about this also during our meeting today, as an aside since we aren't doing the CH 7 any longer. Our attorney said that once the case is closed if there was no mention made of giving the trustee a copy of the return then it would be your money free and clear.

[usmccop]

Just file your taxes. If you get it (the refund), which you probably will, just spend it. Pay bills ASAP. Shoudn't be a problem.

[arami008]

I wonder if they can still take it if we exempted it? We had our 341 today and the trustee did not say a word about it. Here's what we did.


Schedule B
Anticipated 2008 Tax return $6,000

On Schedule C We listed:

We put "Anticipated 2008 Tax Return"
(Husb)11 U.S.C. 522(d)(5) $3,000
(Wife)11 U.S.C 522(d)(5) $3,000

It might be off topic but where do you find the codes that go right next to the exemptions.??? Thanks

[danaf]

OOOps - I didn't see this thread and posted my own. Trustee wants my 08' taxes. Good thing I adjusted my withholdings throughout the year to try to even out. I'm maybe getting $400 if even that. I wasn't aware one could exempt future withholdings. If one does have cash exemptions I understood it to be 'cash on hand' on day of filing.

So lesson learned for those filing in early 2009 - adjust your tax withholdings after you file so next yr trustee doesn't get much.

[soleprop]

Since our case discharged and closed 10/08 (no asset case), is it safe to assume that any tax refund we receive for 2008 is ours to keep?

never safe to assume; only safety we all have is applying exemption codes to protect the assets we wish to keep - including future tax returns.

They won't tell you that at your 341, it will just happen.

sneaky 3($U@#EQs.

I wonder if they can still take it if we exempted it? We had our 341 today and the trustee did not say a word about it. Here's what we did.

Schedule B
Anticipated 2008 Tax return $6,000

On Schedule C We listed:

We put "Anticipated 2008 Tax Return"
(Husb)11 U.S.C. 522(d)(5) $3,000
(Wife)11 U.S.C 522(d)(5) $3,000

i did the same; will update the forum if i experience any issues regarding my tax return.

How about the filing process? I was an individual, Chapter 7, no assett case and closed in September. I have been doing my taxes myself with the help of some software. Should I consult a preparer this year or does my bankruptcy have no effect on my return/refund?

my understanding is that filing taxes in your particular bk situation is business as usual - no bk affect. i do recall there being some instances where filers have to pay taxes on the amount they have had discharged or forgiven - no sources to back that up though, and if i recall, it didn't apply to us.

someone with the knowledge, help clarify? thx