Verifying Child Care Expenses on Means Test

[Moneypenny]

I have undocumented child care that I pay cash for. The attorney I talked to did not seem to care that it was undocumented. Which made me wonder, when you go to file you do not need to document your expenses in any way?

I am trying to get under the bar for the means test and childcare is a big expense that makes a difference. Also I was wondering if you dont need documentation why people just dont plug in whatever is a the max reasonable amount to pass the means test.

Thanks,
Miss Moneypenny

[justbroke]

Each Trustee has guidelines published (or not published) which basically indicate what expense levels will be questioned.

You always need to be prepared to provide documentation for any non-IRS based expense placed on your phone. That's everything from proof of a car lien, insurance, medical insurance, telecommunications expenses, excess home energy costs, etc. In fact, many things on the Means Test (form) list these things and states that documentation is required.

As for plugging in the max, many do, and get questioned by the Trustee, especially when they are borderline (over median and just barely squeaking under the "presumption of abuse" radar).

[jennordhavn]

I did not have to provide receipts, but I could easily have provided documentation if necessary. As to why people don't just put any amount, you are swearing under penalty of perjury that you are putting the correct amounts on your petition. It would not be worth the risk of getting my entire case dismissed to lie about how much I paid for something.

[SuzieBK]

So if I'm filling out a sample means test, and we use the national/state standards, I may need to provide documentation that we actually spend that much? Or is that only for items that don't have an IRS standard?

[justbroke]

So if I'm filling out a sample means test, and we use the national/state standards, I may need to provide documentation that we actually spend that much? Or is that only for items that don't have an IRS standard?

In a Chapter 7 and below the median income, you may have to defend what you put... even if it's the national/state standards.

Schedules J uses actual expenses, so using the standards for everything would surely send up a red flag.

The key is... you put your actuals. You use the IRS Standards as a guideline. Based on various things, including but not limited to local practice and the Trustee, some IRS Standards may even bring scrutiny and the need for receipts.

I think this is the first time I've ever wrote this on this board, but Trustees seem to operate by intimidation.

[chad9162]

In a Chapter 7 and below the median income, you may have to defend what you put...

What if you're over the median salary? I haven't saved receipts for groceries, clothes, prescription medication, oil changes, gas, etc. The only thing I could prove would be things like utilities, energy bills, things that actually have a bill.

?????

[TEW]

What if you're over the median salary? I haven't saved receipts for groceries, clothes, prescription medication, oil changes, gas, etc. The only thing I could prove would be things like utilities, energy bills, things that actually have a bill.

?????

then you use the IRS allowances

[chad9162]

Really, its that simple huh? So why do people under the median have to justify their expenses?

[TEW]

are you trying to claim something over the allowances?

[chad9162]

Nope I only want the standard. I got confused when people said they needed receipts and show "actual" expenses. I read that if you're over the median then you could use the "standard", but that didn't make sense to me. I thought they'd scrutinize people who are over the median more....

So on Schedule J if I use the standards it won't trigger red flags????

[jennordhavn]

So if I'm filling out a sample means test, and we use the national/state standards, I may need to provide documentation that we actually spend that much? Or is that only for items that don't have an IRS standard?

Is there a national/state standard for child care? I don't recall that. I know for the means test there are standards for housing, utilities, clothing, etc.

For child care I would list actual amounts on both the means test and Sched. J.

[justbroke]

So on Schedule J if I use the standards it won't trigger red flags????

Succinctly put, anything you enter on Schedule J, in a Chapter 7, will be scrutinized if it is outside the parameters of the local Trustee.

I suggest that you have receipts for everything, in case it is questioned. That way, you don't end up having to back out amounts, and being pushed into a Chapter 13.

The standards are the highest you can use, without sufficient explanation and documents, when you are over median. You always use actual expenses or the standard, whichever is less. If you do need to go over, you need to be prepared to show that you paying that.

Even with what I said, and going over and having documentation, you may still not be allowed to exceed certain limits imposed by the IRS, U.S. Trustee, or by local practice.

There is no national standard for childcare as that differs. Again, most (local) Trustee offices have guidelines for practicing attorneys that lists what the (local) Trustee thinks are the limits. This varies by District and Trustee. With childcare, I would be prepared to with the documentation readily available.