Tax return/Refund question

[cz3ch]

I am in a Chapter 13 plan and paying on it properly, even a bit ahead of schedule.

I just received my W2 and according to TurboTax I will be getting a refund of approximately $1,500 for 2013. I still owe the IRS $750 back taxes which I'm paying on (installment plan) and I'm sure they'll pull from the $1,500 to satisfy the debt. My question is what happens to the remainder of the refund. Will I get to keep it, or will the Trustee try to take it?

I wanted to know if there was anything special I needed to do before I file.

Any feedback would be greatly appreciated!

[justbroke]

I am totally confused. If you are in a Chapter 13, you would not be in an installment plan unless you fell behind on your taxes after filing. If that is the case, these are post-filing taxes for which you went on an installment plan, then the IRS is very likely to setoff the $750 you still owe and then send you the rest.

You would need to look at your Order Confirming Plan to figure out what you are to do with any refunds.

[cz3ch]

I am totally confused. If you are in a Chapter 13, you would not be in an installment plan unless you fell behind on your taxes after filing. If that is the case, these are post-filing taxes for which you went on an installment plan, then the IRS is very likely to setoff the $750 you still owe and then send you the rest.

You would need to look at your Order Confirming Plan to figure out what you are to do with any refunds.

Sorry for the confusion. I filed BK originally in 2012 and my Chapter 13 plan started in 2/2013. I apparently didn't withhold enough for 2012 and went on a installment plan on 6/2013 to pay the taxes owed for 2012. So I guess these are post-filing taxes. I am already prepared for the IRS to setoff the amount I still owe but wanted to know if the Trustee would be asking for the rest.

My attorney just responded with: "File as normal, and let the IRS take the amount you owe, you should keep the remainder". However when I asked about needing to send a tax return to the Trustee she said to send a copy of my return to the IRS Insolvency Section.

I guess I'm a bit confused too since this is my first tax return since being in plan and not sure how things work.

I looked at my Order Confirming Plan and it does not cover anything in regards to tax refunds. It's very minimal.

Thanks for your response.

[justbroke]

If it (your Order Confirming Plan) does not say anything about taxes, then they are yours to keep. I mean, whatever is left after the IRS takes the amount that is in arrears. It is common, in some bankruptcy Districts, that debtors are allowed to keep their returns if a.) it is under a certain amount, and b.) the potential (and average) refund was already calculated in the disposable monthly income!

(As for sending your tax return to the Insolvency division, you would just file normally. The Insolvency division will be notified. In fact, if you file electronically, there will probably be an initial hold on your taxes, but then they will bet setoff and then released. This hold usually doesn't last longer than a day -- at least in my case it was very very quick.)

I would still not count my chickens yet, but you could start thinking about having chicken one night in the future.

[cz3ch]

Thanks for the the reply JB. I just now saw your response. I've already filed electronically via TurboTax so I guess I will just wait for the IRS to do their "magic" and see what I get back in the return. From my calculation my refund minus what I owe in arrears I should be getting back approximately 1k. So I may actually be able to have a nice dinner or put away the money for a rainy day