Please read...Trustee taking our tax return after discharge...

[RRD]

We just received a letter today stating that our Trustee was going to take our full tax return for 2008. We were discharged in Nevada on September 30th. Has this happened to anyone else? Is there any way around this?

Thanks for input.

[HHM]

That is perfectly normally. So long as your case is "open", the trustee can admin the assets.

[RRD]

What do you mean by open? After it's discharged, isn't it closed? How many years can they do this for? And how would I know when it's "closed"?

[justbroke]

What do you mean by open? After it's discharged, isn't it closed? How many years can they do this for? And how would I know when it's "closed"?

Discharge does not equal close. Discharge is just when your prior dischargeable debts are discharged.

If the Bankruptcy Estate has assets to still manage (like waiting for your income tax refund), the Trustee can keep it open to manage, receive, and disburse those funds.

It's closed when it reads as such in PACER or you get an official notice that the case is closed.

[RRD]

That sucks....so can they keep taking tax refunds or once it's closed, they can no longer take them? I did not know that any of this was even a possibility. Thanks for the helpful answers. This was quite a shock.

[HHM]

They only get one tax refund.

[JayJay]

well, at least you can enjoy your tax return in 2010 =-)

[allavdj]

If you haven't filed yet, you might "forget" some deductions to lower your refund and carry them over to next year. Might wanna go over that with a tax person though. You would want to make sure that you -can- carry over whatever you plan on leaving off though. It's skirting on the lines of fraud, but there are no laws stating you have to claim all your deductions in a given year.

It's kinda like: Is it a lie if you omit some facts?

p.s. I'm not a lawyer or an attorney nor am I advising you to take any specific action...merely throwing out a possible course.

[magyar123]

One way of eliminating the refund when you file is to note on the bottom of your tax return that you don't want your refund this year but to apply the amount towards next year's taxes.

[floridian]

might the trustee get a copy of your returns and read that you didnt want a refund this year?

[momof3b1g]

might the trustee get a copy of your returns and read that you didnt want a refund this year?

I'd like to know this too. Would that be legal? I'm thinking they could still take it. But next year when you actually get it.
What about the 2009 refund? If we spend our 2008 refund then file say Feb 2009. Can they take any of the 2009?

[Bell30656]

Those that haven't filed as of yet, can look at this thread and realize that maybe this is the year that you want to wind up owing taxes rather than receiving a refund. Last year I began reading about people losing their tax returns on this forum. Thus when I got divorced, I made certain that my deductions would put me in the just owing category. I think I'll owe a $100 or less.

You know if you were to "forget" certain deductions you could file an amended return later in the year or even next year. Speak to your tax preparer about this. When I first started using a CPA for my taxes he re-figured my previous three returns and filed amendments causing me to get a check back from the IRS for years gone by.

[RRD]

One way of eliminating the refund when you file is to note on the bottom of your tax return that you don't want your refund this year but to apply the amount towards next year's taxes.

The note explicitly states we can't do that. Even though we were discharged in September, our lawyer said we were federal exempt that he's going to fight it. It was exempted. So there's still a chance that we can keep it!

[RRD]

Thank you all for your input! Even if the trustee gets it (if our lawyer loses), it's a small price to pay for discharging 175k in debt! Bye Bye new car

[liz417]

Thank you all for your input! Even if the trustee gets it (if our lawyer loses), it's a small price to pay for discharging 175k in debt! Bye Bye new car

That's a good way to look at it. It's well worth giving up a few bucks compared to our 175k debt, collection calls, etc. Good Luck!