Question about Tax Return and Bankruptcy

[kozer1]

I am preparing to file a Chapter 7. I am meeting with an attorney this Friday for the initial consultation. It is my understanding that, during the 341 hearing, you must present the 2 most recent tax returns (In that case, I will present 2011 and 2010). However, I have an issue with my 2010 tax return in that there is some missing income that wasn't reported properly. My husband's boss paid him, at times, with personal checks and did not report it to his (his boss') accountant as payment for employment to my husband. I am unsure about what that income was reported as (what his boss' accountant did with that money....If his boss wrote it off as something else.) Counting the personal checks and actual reported business checks, his income was about $30K. However, his boss only reported $12K on the W2. Being that it was 2010, does it really matter? I have to ask the attorney, of course. Will it be questioned in the hearing at all? Do they care to look into details of years past (asking for paychecks from that year, etc.) We are WAY under the median for NJ (Median for family of 4 is $8,500 and our income is $3,800) The dischargeable debt is about $20K. We are in the red every month (expenses exceed income). Not sure if any of this matters when it comes to the questionable tax return. 2011's tax return is fine - no blips at all. I don't know what to do if it'll present a problem because we HAVE to delcare bankruptcy. I have a levy on my account and another lawsuit coming up. I can't image waiting another year or two to not present 2010's return. It's not feasible! My husband is afraid of getting in trouble over this.

Advice, please

[mountanddo]

Did your husband ask his employer for an amended W-2 and did you amend your 2010 tax return to reflect that actual additional income? The difference between 30k and 12k is a big jump. Did the employer take taxes out of the personal checks that were written to your husband? I think the first thing you need to do is fix the issue with the 2010 tax return. As far as it really mattering. I'm pretty sure it does or they wouldn't ask for them. How will you explain a 18k difference? Sounds a bit fishy to me.