Tax Returns and the Trustee

[RedLight]

Sounds like a horror movie I know. I just picked up a copy of the new turbo tax as I already received a copy of my W2 from my previous employer and wanted to get a head start. My W4 exemptions was really low so for over half of the year, I was getting a large portion taken out. So, along with my two children I will be getting a fair amount of money back.

In the paperwork received from my atty it says that if I receive a tax return greater than $2,500, I must notify the trustee. I really don't understand why they would need to be notified...do people commit some type of fraud with this...I can't figure it out.

regardless, DW and I are a no asset CH7 and we are just starting to get back on our feet, so I don't know why they would want to take any return over that. I guess the real question is, has anyone filed here and had a return over $2,500 and what were the reprocussions of it from the trustee? Thanks!

[Mi Bankruptcy]

We had plenty of room in our exemptions and were well below the median for the size of our family. I told our attorney that I wanted our 2008 tax return exempted. He said he wasn't worried about it because of where I was on the median and my exemptions. I told him I wanted it listed anyway. He listed it on

Schedule B
Anticipated 2008 Tax return 6,000

On Schedule C
He put "Anticipated 2008 Tax Return"
(Husb)11 U.S.C. 522(d)(5) 3,000
(Wife)11 U.S.C 522(d)(5) 3,000

[TEW]

The trustee is going to take anything above the 2500 you get from your tax refund.

[Mi Bankruptcy]

TEW could be right because I have yet to meet with my trustee. However, I think my attorney is also right ( for my case)

(5) The debtor’s aggregate interest in any property, not to exceed in value $800 plus up to $7,500 of any unused amount of the exemption provided under paragraph (1) of this subsection

http://www.law.cornell.edu/uscode/11/522.html

[RedLight]

http://www.txs.uscourts.gov/bankruptcy/rulesformsproc/ch7duties.pdf

10. You must provide written notice to the Trustee of any tax refund in excess of $2,500.00 you anticipate receiving or actually receive.

It says that I have to provide written notice, I wonder what makes them take some of it or not? I could always prepare my taxes to end up at almost exactly $2,500. Should be close to that, but I know I will go over.

[dogbone33]

I was told by our attorney the trustee will take 11/12ths of our return. We should get around 8k. We are low income and have 2 children and my business hardly makes a profit. The government gives us the low income credit and 2 credits for our kids. I just don't get how they can take those. I can see what was overpaid to be taken. But we get those to help us get on our feet and then they take it! I just don't understand.

[santadawg]

I'm with you dog, it doesn't seem right