Never Filed Tax Returns. What to give TT before 341

[k10]

Thanks in advance for your help. I filed ch. 7, and I have my 341 coming up in early January. The US Trustee is requesting the standard stuff before the 341 (previous year tax returns, bank statement reflecting filing day balance...). The last time I filed taxes was in 2002 for a paltry amount of income I had received for a summer job. I havent worked since. I've been living off of my parents and student loans, as I have been a student since '03. I'm looking to discharge some 40k in cc debt. Should I give the trustee the those '03 returns, or include in the packet a statement similar to what I've written here?

[Flamingo]

I am assuming your parents are claiming you as a dependent since it appears they are supporting so you would need to show that probably with a copy of their tax return which would list your name on the front as a dependent. If they are not claiming you as a dependent and you are not living with them and they are supplying you with funds, talk to your attorney because that could be considered income to you. The same if you are living with them and they are not claiming you as a dependent - their funds would be household income. Best of luck to you.

[HHM]

Probably don't even need to do that, there is affidavit that you fill out stating that you are not required to file a tax return.

[justbroke]

I would agree that a person who is not required to file a tax return, under the IRS rules, may submit an affidavit, under penalty of perjury, indicating such.

[backtoschool]

I agree with HHM and justbroke about providing the affidavit saying that you do not have to file returns.

Any money that your parents are giving you regularly, especially if you live on your own, would be considered income and should be declared on your schedules.

[k10]

Thanks for the advice; its well appreciated. I just graduated from school, and I am living in my parents house. They basically pay for everything (food, utilities [b/c its their house], etc.). They do give me about $500/month for extra food spending and entertainment. I did count that as income on schedule J. Can you go into more detail about the affidavit, as I'm Pro Se?

[justbroke]

Check with your Case Manager and ask if there's a standard Affidavit for this. For example, the Illinois Affidavit of Compliance may be similar to what you would file.

You basically need to have it sworn before a notary. Again, I would ask your Case Manager if your District already publishes such a form.

[Dst1]

Not that it applies to my situation at all but my understanding was that the IRS did not consider a gift tax reportable unless it was over 10K a year, which the OP is not.

So as I understand it there is income that must be declared on BK that is not income for tax purposes. Am I understanding that correctly?

[justbroke]

Not that it applies to my situation at all but my understanding was that the IRS did not consider a gift tax reportable unless it was over 10K a year, which the OP is not.

Gifts are not reportable by the recipient when they are under $13K. In any event, the person giving the gift usually is the one who pays any gift tax, not the recipient. Bankruptcy doesn't care if "income" is taxable or not, it's still income.

Now, the parent's "regular" gifts to the OP for living expenses is income... taxable or not.

So as I understand it there is income that must be declared on BK that is not income for tax purposes. Am I understanding that correctly?

As I wrote above, Bankruptcy treats all money received from all sources, regardless of tax status, as income.... with limited exceptions.

[music12]

imo, the OP definitely does not need to provide his parents' tax forms. that would be a violation of their privacy - they are not filing bk, they do not need to be scrutinized.

i think you could provide the last return that you filed in lieu of the 2009 one, and probably an affidavit saying why. since you are pro se, why not call the trustee's office and ask what to do in your situation, whether they need the affidavit or the 2002 return or what. they will probably tell you what this trustee wants, perhaps better than the court clerk even.

[justbroke]

Yes, the OP should contact the Trustee or Case Manager to find out the appropriate form and/or text to use. Make sure you ask this as a "procedural" question, as they won't provide legal advice.

"I need to ask a procedural question... how do I provide an affidavit that I was not required to file an Income Tax Return with the Internal Revenue Service for the years..."

[music12]

yes, remember to say the words "procedural question" otherwise they will automatically assume you are seeking legal advice. it's funny, a lawyer would get an answer without using the words "procedural question" and the lawyers are those who don't need the legal advice! how the world works...

the nice thing about how justbroke phrased the question is, that if this trustee does not need an affidavit, they will tell you it's not necessary and they will tell you what is necessary... However, if you were to ask whether you need an affidavit, they would not answer you because that's legal advice. kind of silly.

[Dst1]

As I wrote above, Bankruptcy treats all money received from all sources, regardless of tax status, as income.... with limited exceptions.

Thanks Justbroke. I did not know that. I learned something new today.

[justbroke]

Thanks Justbroke. I did not know that. I learned something new today.

Alas, the Code reads that way, but it's still argued about. Actually the BK Code doesn't define "income", but does define "current monthly income" (CMI). It is in the CMI definition that the Code (11 USC 101) says it's everything you receive.

Some "income" is protected, such as benefits received under the Social Security Act (SSA). The Bankruptcy Courts can't even agree on this part. It appears that Unemployment Insurance (UI) is actually part of the SSA. Some Courts agree and UI is not part of your CMI... yet other Courts/Districts say that it is.

In the end, it appears that not everything is absolute in Bankruptcy. A lot depends on your venue.

[Flamingo]

imo, the OP definitely does not need to provide his parents' tax forms. that would be a violation of their privacy - they are not filing bk, they do not need to be scrutinized.

i think you could provide the last return that you filed in lieu of the 2009 one, and probably an affidavit saying why. since you are pro se, why not call the trustee's office and ask what to do in your situation, whether they need the affidavit or the 2002 return or what. they will probably tell you what this trustee wants, perhaps better than the court clerk even.

The reason I mentioned the parents' tax returns, are they claiming the OP as a dependent? If so, that's a whole other ballgame here as to household income for the OP as she resides with the parents. If she was a dependent and had no income that would prove it (it does not involve the parents in any way - just proves for tax purposes she is a dependent and resides with them). If they are not claiming her, then of course she would not be listed on the parents' tax return as a dependent and would need another way, if necessary to show that she did not have to file any tax returns for the years in question. Any funds provided to her by the parents would be income and then there is still the question of the parents income as to total household income.

To the OP - do your parents claim you as a dependent? Are you aware that since you live with them their income is household income? I understand you are filing pro se but there are some implications here that could come out and bite you if they are not researched correctly for your particular situation.