Why does the trustee want tax returns?

[sal425]

If your income is based on your last six months of pay stubs, why the need for the tax returns? I am afraid my annual bonus will come into play even though it may not happen this year because of the economy.

[HHM]

It is simply a requirement to file BK. The code requires the submission of tax returns with your petition.

The means test is fairly specific about the 6 month look back, so you won't have an issue with a bonus that is on tax return, but is not on 6 month look back.

[music12]

sometimes the tax return can reveal assets; it's basically a way to "encourage" people who file bk to report all their assets or be caught.

[frogger]

My tax return has all kinds of assets listed on the depreciation schedule. No way to hide them, even if you wanted to.

A tax return tells many tales.

[OhioFiler]

My tax return has all kinds of assets listed on the depreciation schedule. No way to hide them, even if you wanted to.

A tax return tells many tales.

Do we typically have to provide the entire return including all schedules?

[music12]

Do we typically have to provide the entire return including all schedules?

i think so. a tax return includes all attached schedules. withholding any would raise a big red flag i would think.

[frogger]

When the return shows depreciation, if I were the trustee, I would certainly want to know what you were depreciating. That would be a great source to locate any assets that you might try to hide.

And yes, you're going to have to produce all schedules.

[JRScott]

The reason that Trustees target tax returns is that some people use it like a bank and hide assets in it.

In truth if your getting back more than a hundred dollars or so you need to readjust your payroll deductions because you are letting the government use your money interest free for up to a year, and that's money you could more properly use in a monthly budget.

[sal425]

That's a good point. Has anyone had their trustee include their potential tax refund in their means test? I am probably expecting $2k back which would probably push me to a 13.

[JRScott]

It'll be part of your means test as already earned income, but it doesn't add more if that's what your asking. However it would be a potential asset.

[OhioFiler]

It'll be part of your means test as already earned income, but it doesn't add more if that's what your asking. However it would be a potential asset.

Where it can be an issue is on Schedule I if the trustee wants to use your actual payroll tax liability not what is shown on your paycheck. Those who bank their income with the Treasury may be understating their average monthly income on Schedule I.