4 Years after Discharge - and now Trustee takes tax return??

[jonwh25]

Is it normal 4 years after my BK was discharged for the Trustee to tell the IRS she gets our tax return??

I was checking our paperwork and we were discharged March 2007. There was a court document in there that said the Trustee gets the 2006 tax return. We had to pay taxes that year and thought it was done. We got tax returns for years 2007 and on and not once did they take anything. Now all of a sudden they put a hold on my tax return. I don't get it...

[ssmdem]

Did you file with an attorney back then? Are they still around? That's interesting and kinda scary. We're having to pay for 2010, so our trustee has abandoned any assets. Hope we don't have this issue in the future.

[despritfreya]

We are not being told the whole story. A Chapter 7 Trustee would not be entitled to post petition tax refunds so, who is "they", the Trustee or the IRS and, is your case closed, never been closed, or closed but now reopened?

A Trustee might be entitled to post petition tax refunds if somehow you managed to carry forward some loss that you could have claimed in 2006 thus delaying the payment of a refund into a later year.

A Trustee might be entitled to intercept a tax refund due to some failure to turnover property of the estate. I have never seen this happen but. . .

We simply do not know enough of what is going on.

Des.

[tcreegan]

Hi jon,

Did you confirm w/ the IRS what the hold is for?

Tom in Colo

[jonwh25]

Story

2007 BK was discharged (Tampa, FL) We also walked away from our home in May of the same year. Then got a foreclosure notice in June of the same year. We figured things were going as they should.

2008 - A couple notices about foreclosure going on still but nothing else.

2009 - New job in Indiana so we moved. Tried to get a house, got denied saying foreclosure was still going on. Lost $4k in that mess.

2010 - got notice that our bank sold our account to another bank. foreclosure stalled again and they had to start the whole process again. Got into a house on a land contract. Put a $25k down payment on it. The contract has 4 years to make sure the foreclosure doesn't screw us again.

2011 - foreclosure still not completed. Checked tax refund status on irs website said there was a hold and to call. We called the IRS who said trustee in Tampa was going to take our refund and put in for it Nov of last year. We have left a message for our trustee to tell us what is going on and get the details, but we never received a notice from the trustee or anything.

The bad part of all of this is we received our state refund last Friday, and I figured the federal would deposit monday or tuesday. I knew I shouldn't have spent anything, but I did (didn't have any problems the past couple years with refunds). Now I have zero money to last until next friday. so that means no money for food or gas... uggg.

[despritfreya]

It appears the Trustee is not entitled to the refund. This is where having an attorney helps. I would be yelling at Special Procedures if that was the reason for the hold up. You need to check Pacer and find out when the case was closed. There is a 1 year window in which it can be reopened and it sounds like you are long past it. Once you have verification of the closing call the IRS - bankruptcy unit, not some "flunky" at the 800#, and demand the release of the $$.

Des.

[jonwh25]

Update

We got in touch with the BK Trustee. Apparently the case was never closed out because we owe the Trustee $750 which we didn't know about because they have been sending all the mail to our old address that was/in foreclosure still.

The Trustee said it's not their responsibility to track us down if we move. We had our mail forwarded when we moved but I guess that expires after 6 months. So I'm thinking a notice wasn't sent until long after we moved. I am betting that mailbox is pretty full by
now.

What a mess. We have been trying for months (about the foreclosure) to get in touch with our old attorney but they refuse to call us back. Every time we call we are told they aren't in and to leave a message, which we do, but we never get a call back. We called again today and told them to make sure they call us.

How frustrating this all has been. It's been nothing but hell for 4 years.

[despritfreya]

You need to cut the Trustee a check and be done with it - or let him take the refund up to the amount that is owed to the estate.

Des.