Another tax refund question

[justagirl]

All this talk about tax refunds has my brain spinning and all kinds of questions are coming to mind, so here goes...and I promise it is a different type of question than those recently asked!

Here's the scenario: Jane Doe recieves a sizable tax refund each year in the amount around $5000. It appears she will continue to receive such large returns for years to come. Could the trustee potentially reject a chapter 7 filing citing abuse, stating the large tax return could be used towards repayment of debts, i.e., funding a chapter 13?

~JAG

[aces67]

I would think that would go back to disposable income. I guess if you're getting a sizeable refund every year you could divide it into 12 and add it back to your income. Then see if you have disposable income after that.

[justagirl]

Thanks for the response...that is what I was thinking also. I was just curious as to others' views on the scenario.

BTW...congratulations on discharge!

~JAG

[jribe]

All this talk about tax refunds has my brain spinning and all kinds of questions are coming to mind, so here goes...and I promise it is a different type of question than those recently asked!

Here's the scenario: Jane Doe recieves a sizable tax refund each year in the amount around $5000. It appears she will continue to receive such large returns for years to come. Could the trustee potentially reject a chapter 7 filing citing abuse, stating the large tax return could be used towards repayment of debts, i.e., funding a chapter 13?

~JAG

here's the thing: some trustees view larger returns and calculate that money over a 12 month period to see how much extra you could be paying towards your debt.

If they determine that you should be able to adjust your withholdings to get a much lesser return- they can say to do that; and it could push someone into a 13.

They cannot simply "attach" a return 3 years down the line (lets say) unless you're doing a 13 (then they can).

I have seen trustees that will do what i mentioned above for debt repayment though.

[OhioFiler]

When you complete your schedules you are required to list current actual expenses (income taxes are an expense). If you are using the US Treasury as a place to hide assets most trustees will recognize this and adjust your disposable income accordingly.