Tax Return

[mountanddo]

How do you know if your trustee requires you to turn over your refund? I read all my paperwork and it says nothing about tax refunds.

Also, I am paying $410 in my plan for my 2009 federal back taxes. Will the IRS simply just take any refund and then the extra money goes to my unsecured creditors?

[justbroke]

How do you know if your trustee requires you to turn over your refund? I read all my paperwork and it says nothing about tax refunds.

You would look at your Order Confirming Chapter 13 Plan for any information. Your order/plan may only require that you serve a copy of the tax "return" each year on the Trustee. In my confirmation order, I had to serve a copy of the return each year, as well as surrender any refund (unless I had permission to keep it).

Also, I am paying $410 in my plan for my 2009 federal back taxes. Will the IRS simply just take any refund and then the extra money goes to my unsecured creditors?

Generally speaking, the IRS removes the "intercept" of future refunds where you are in a Chapter 13. They consider the confirmed plan to be a guarantee of payment of the past due amounts. Be aware that some Trustees have (or try to) intercept refunds by directing the IRS to send the refunds to the Trustee. This is not "legal" and Trustees have been spanked for doing this.

You should get your refund. You may notice, though, that if you filed electronically and check the status, you may see an "error" code. In those cases, my refund was still released on the estimated refund date electronically. They just need to manually release the funds.

[mountanddo]

My plan won't be confirmed until February.

[justbroke]

Well, for $410, I don't think the IRS will offset your refund. The problem is that even if they do offset the refund, it's still "exercising control over property of the estate". The IRS could offset and hold the money but would need to file a Motion for Relief from the Automatic Stay (RFS) in order to "keep' the offset. This is just not worth it for $410.

You are likely to find that they won't touch your refund!

[8forme]

We also have taxes included in our plan. Our attoney told us to NOT file electronically, gave us a form to fill out and submit with our taxes that states we are in a CH13 so they will NOT keep our refund. We won't get a refund this year anyway, but in future years in case we do get a refund. It states some legal talk about the CH13 taking care of the arrears and how they can't legally keep any refunds for future years as long as we don't owe any more taxes since filing our 13. Clear as mud, right? LOL!!

ETA: We just got our confirmation papers in the mail last week. In it there is NOTHING that states anything about taxes, period. No refunds, no copy of returns, nothing. Maybe because we have owed about 2K for the past 3 years and we don't get big refunds, I don't know.

[Flamingo]

We also have taxes included in our plan. Our attoney told us to NOT file electronically, gave us a form to fill out and submit with our taxes that states we are in a CH13 so they will NOT keep our refund. We won't get a refund this year anyway, but in future years in case we do get a refund. It states some legal talk about the CH13 taking care of the arrears and how they can't legally keep any refunds for future years as long as we don't owe any more taxes since filing our 13. Clear as mud, right? LOL!!

ETA: We just got our confirmation papers in the mail last week. In it there is NOTHING that states anything about taxes, period. No refunds, no copy of returns, nothing. Maybe because we have owed about 2K for the past 3 years and we don't get big refunds, I don't know.

We received refunds the last two years of our Plan and we were required each year to turn over our federal and state tax returns within five days of filing to our Trustee. If and when you find out you are receiving a refund during your Plan years, contact your attorney to find out whether or not you will be able to keep all or part of it. We contacted our attorney when we found out we were getting refunds and we ended up getting to keep both of them.

[mountanddo]

We received refunds the last two years of our Plan and we were required each year to turn over our federal and state tax returns within five days of filing to our Trustee. If and when you find out you are receiving a refund during your Plan years, contact your attorney to find out whether or not you will be able to keep all or part of it. We contacted our attorney when we found out we were getting refunds and we ended up getting to keep both of them.

Since it's been said on this board that your attorney represents you up to your 341, I don't think I'll be contacting my attorney! Especially since they want to charge me $78 for the 2nd debtors course and don't even tell you there is an alternative. I can't imagine what she'd charge me to answer questions.

I'll assume if I need to turn over tax returns or refunds that I will get notice to do so.

[Flamingo]

Since it's been said on this board that your attorney represents you up to your 341, I don't think I'll be contacting my attorney! Especially since they want to charge me $78 for the 2nd debtors course and don't even tell you there is an alternative. I can't imagine what she'd charge me to answer questions.

I'll assume if I need to turn over tax returns or refunds that I will get notice to do so.

Don't assume anything while you are in a Chapter 13....when you retained your attorney for your Chapter 13, he/she is your attorney and represents you from the date you signed the retention letter to the date of discharge. That retention agreement you signed will spell out what, if anything, there will be extra fees for....i.e., a Motion needs to be filed, certain additional work, etc. Pull it out and read it.