At my Trustee's insistence, my confirmation order clearly states that I must provide him with copies of my income tax returns within 10 days of filing and surrender all income tax refunds to him during the term of my plan. It's cut and dried, black and white and unquestionable.
Normally this is not a big deal to me. I don't bank with the IRS and my refunds are normally only for a minimal amount. But this year, I received some unexpected several hundred dollars in tax credits, and I wanted to keep my refund due to extraordinary expenses not provided for in my budget and schedules.
So, I filed a motion with my bankruptcy court to retain my 2010 income tax refund, before I actually filed my tax return. I was quite pleasantly surprised when the Trustee filed a comment of NO OBJECTION, but he did also note that he thought my Motion was the improper vehicle for my request and I should have filed a modification of my plan instead of motion.
However, I had also stipulated in my motion that no other modifications were contemplated.
Two full weeks out of suspense, the judge finally approved my order.
Why the heck it took so long? The clerk speculated that he might be taking time to research the issue that the Trustee had raised. And... the judge added one sentence to my prepared order indicating that it constituted a modification of my plan.
So my advice to anyone who has this question come up, if your confirmation order stipulates that you have to turn over your refund to the trustee, and you want to keep your income tax refund, either file a plan modification to request it, or decrease your deductions so you don't have so much going to the IRS in the first place. The latter would not have helped me a bit, as my refund was due to tax credits.
YMMV. Not all Trustees and Judges might be as agreeable and easy to work with as mine are, but this is what worked for me. Good luck!
Normally this is not a big deal to me. I don't bank with the IRS and my refunds are normally only for a minimal amount. But this year, I received some unexpected several hundred dollars in tax credits, and I wanted to keep my refund due to extraordinary expenses not provided for in my budget and schedules.
So, I filed a motion with my bankruptcy court to retain my 2010 income tax refund, before I actually filed my tax return. I was quite pleasantly surprised when the Trustee filed a comment of NO OBJECTION, but he did also note that he thought my Motion was the improper vehicle for my request and I should have filed a modification of my plan instead of motion.
However, I had also stipulated in my motion that no other modifications were contemplated.
Two full weeks out of suspense, the judge finally approved my order.
Why the heck it took so long? The clerk speculated that he might be taking time to research the issue that the Trustee had raised. And... the judge added one sentence to my prepared order indicating that it constituted a modification of my plan.
So my advice to anyone who has this question come up, if your confirmation order stipulates that you have to turn over your refund to the trustee, and you want to keep your income tax refund, either file a plan modification to request it, or decrease your deductions so you don't have so much going to the IRS in the first place. The latter would not have helped me a bit, as my refund was due to tax credits.
YMMV. Not all Trustees and Judges might be as agreeable and easy to work with as mine are, but this is what worked for me. Good luck!
Bankruptcy Wizard
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