Can large income tax refund cause them to review case?

[Llelxon]

I know that I should have done a better job analyzing my income tax for this year, but we had a child born and I just didn't get around to it. Anyway, it looks like we would get a refund of $8000+ for this year. My 60 days are up on Monday, but the Trustee has already asked for a copy of my return, so my case won't be closed until after I file. My question is that when I filled out all of my schedules the taxes were based on what was coming out of my paycheck at the time. If they look at my refund and say that I have an additional $650 month of income because of tax, can they now try to push me to a 13 if that $650 would give me positive DMI?

Thanks,

[Llelxon]

If it would cause problems, I suppose I could always file 1040EZ to reduce the refund. I have 4 kids, so the $4000 in tax credits and other itemized deductions is what is doing it.

[justbroke]

If they look at my refund and say that I have an additional $650 month of income because of tax, can they now try to push me to a 13 if that $650 would give me positive DMI?

Usually not. Remember, your Bankruptcy "estate" is set on the day you file. I haven't seen too many cases, except where there is actual fraud, that a Trustee goes back and vacates the Discharge. More than likely, the Trustee will try to keep all or part of your refund (depending on local customs, when you filed, and whether you exempted any portion of it).

Generally, the Trustee (actually UST) should have already reviewed your prior year tax returns and would have seen your refund and family size. That the UST chose not to dig deeper, is just that you're probably under-the-median and not worth the effort.

[Llelxon]

Thanks JB.

I was just shocked at the amount and am just very nervous after the UST got involved with my case earlier. I surely have had not intentions toward fraud, when the trustee asked about tax refund at the 341 I honestly told him I thought it would be less than last years $4000.

Thanks

[backtoschool]

I think that if the trustee asked to see your return, then you will have to give up your refund, (or part of it depending on when you filed) but it will not affect your discharge.

[mtbc]

I don't know if it may still be possible to amend schedules to exempt at least a portion of it, if there's any extra room under the exemptions you using?