We filed Chapter 13 on 12/06/07. We received the trustee's objections 2 weeks ago. There were several objections, and one was about our tax refund. I had been so worried that she was going to want this year's take refund, I read the paragraph wrong and thought that she was, in fact, referring to our '07 refund, which we haven't received yet.
However, I spoke to my atty yesterday because he had called to remind us that our confirmation hearing is today. He stated that he had never seen anything like this nitpicking that our trustee is doing, and then went on to explain that she wants our 2006 tax refund, which is a refund that we received in April of 2007!!
So I reread the paragraph, and yep, he's right. Here is what it says:
"The debtors' federal 2006 tax return shows a tax refund of nearly $XXXX.00 As the debtors' monthly expenses are covered by monthly income, the tax refund constitutes disposable income and must be turned over to the trustee to fund the plan. A tax refund is overwithholding of income taxes - a "virtual savings account" that is appropriately contributed to the plan to satisfy the disposable income test. (Lists a case citation) - a Chapter 7 case in which the Court held that tax refunds need to be considered part of the estate; Prior case law supports this position. (List more case citations)."
WHAT? How can this be legal? That money is long gone, so I guess she is out of luck. But I'm just wondering how she can even request this or why she would request it when we received the money almost a year ago, and we filed bk 8 months AFTER having received it!
However, I spoke to my atty yesterday because he had called to remind us that our confirmation hearing is today. He stated that he had never seen anything like this nitpicking that our trustee is doing, and then went on to explain that she wants our 2006 tax refund, which is a refund that we received in April of 2007!!
So I reread the paragraph, and yep, he's right. Here is what it says:
"The debtors' federal 2006 tax return shows a tax refund of nearly $XXXX.00 As the debtors' monthly expenses are covered by monthly income, the tax refund constitutes disposable income and must be turned over to the trustee to fund the plan. A tax refund is overwithholding of income taxes - a "virtual savings account" that is appropriately contributed to the plan to satisfy the disposable income test. (Lists a case citation) - a Chapter 7 case in which the Court held that tax refunds need to be considered part of the estate; Prior case law supports this position. (List more case citations)."
WHAT? How can this be legal? That money is long gone, so I guess she is out of luck. But I'm just wondering how she can even request this or why she would request it when we received the money almost a year ago, and we filed bk 8 months AFTER having received it!
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