Yet another Tax Return question

[ScaredINMich]

Haven't filed BK or Taxes yet. Always get a refund of about $5000-$6000. If we file in the next few weeks, can we wait to file taxes until the last minute and keep our refund?

OR, I talked to my accountant and he said that he thought it was possible to push my refund to 2011. Would that be wrong or doable?

[Meatstick]

You will be asked to supply your 2010 Fed and State Income Tax returns to your TT before you even have your 341. However, you can file, receive and then spend down any refund on allowable expenses before you file. If you wait until after you file BK to file your 2010 tax returns there is a good chance your TT will seize all or part of it.

You should probably consult with a BK attorney instead of your accountant. Not a good move at all to try and find ways to circumvent the system.

Good luck !

[daylate]

Agree with Meatstick. Only way you can defer the refund is to apply it to 2011 taxes and I don't see a trustee letting that fly. I may be wrong but if that was the case, everyone would do it. Other way is to not file, since you do not owe there is no penalty for not filing but from what I read here trustee is going to want to see the return. No file, no return, my guess-no discharge and an annoyed trustee.

[HHM]

Agree with Meatstick. Only way you can defer the refund is to apply it to 2011 taxes and I don't see a trustee letting that fly. I may be wrong but if that was the case, everyone would do it. Other way is to not file, since you do not owe there is no penalty for not filing but from what I read here trustee is going to want to see the return. No file, no return, my guess-no discharge and an annoyed trustee.

You are right, in reality, this plan doesn't work. There was a recent case out of CO (I believe) where the tax payer deferred their refund to pay next years taxes. What happens is that the trustee CANNOT force the IRS to turn over the refund. HOWEVER, the trustee can simply keep your case open until the following year because your RIGHT to receive that refund existed at the time you filed BK.

Best way to handle tax refunds is to file your taxes, get the refund in hand, spend it (or exempt it), and THEN file BK. With the amount of money you are talking about, bet hire an attorney to help you navigate the grey area that is pre-bankruptcy planning.