Another tax refund question..sorry

[monkeyface]

Hi Everyone. This is my first post although I have been reading for a very long time.

We just filed Chapter 13 on the 15th. Our 341/confirmation is on May 25th. We are paying back taxes in our 13 and have a large refund (for the first time) for 2010. The refund is listed as exempted on our plan. Does this mean we will really get it or will it still be applied to our back taxes?

[AngelinaCat]

Hi Monkeyface:

Welcome to the forum. There have been several threads on this topic just in the last couple of days. It seems that the issue of tax refunds in a Ch13 is a matter that is very specific to the District and individual trustee in that district. According to what I have read, since you are repaying the IRS in your plan, your tax refund should be exempt. And I see that you have said that it has been exempted in your paperwork. You should be okay, but to be on the safe side, double check with your attorney.

Good luck!

[monkeyface]

Hi! Just to update this thread....I received a letter from the IRS saying they applied my refund to taxes owing. BOO!

[AngelinaCat]

I figured that would happen. We owe mega taxes to the IRS. Last year, the first refund we got in YEARS was applied to what we owed.

I know you were looking forward to that money, but look at it this way: it is money YOU don't have to shell out now, and shortens your ordeal with paying IRS back.