topic Re: Do I need to turn over a tax refund after DC in May? in Bankruptcy

Do I need to turn over a tax refund after DC in May?

heather06 — Fri, 01 Nov 2024 19:28:27 GMT

I had a BK DC in May this past year. Filed Ch 7. At the time - our taxes were not filed as we had an extension. My CPA just did our taxes and we are receiving a refund. I have sent several emails and made multiple calls to my BK attorney and they will NOT return any of my calls/emails! They basically have cut off all communication right after DC with no guidance on how to move forward after DC. Im frustrated and unsure what to do about our refund. My husband did NOT file BK with me - all the debts were in my name at the time.

My questions are: Was I supposed to supply anything to my CPA about the BK? Are we allowed to keep our refund since it was for the year that I filed my BK? Should the refund be deposited into my husband's account or our joint account? Do I need to report any of this to my lawyer or the trustee? The lawyers/trustee have had zero communication with me since DC and I'm not sure how to have my CPA complete the tax return until I get this information.

And I certainly do not want to pay for another BK lawyer to give me direction on something that should come from the original one I hired to take care of this.

Any guidance would be much appreciated. I feel like I am in limbo here....

Re: Do I need to turn over a tax refund after DC in May?

FicoMike0 — Fri, 01 Nov 2024 22:32:37 GMT

Did you ask the cpa? They know this stuff.

Re: Do I need to turn over a tax refund after DC in May?

heather06 — Sat, 02 Nov 2024 04:55:10 GMT

I did but she said she does not know as she is not that familiar with working with BK clients. Not sure how to move forward from here and so frustrated that the law office I hired refuses to answer any of my questions or return my calls.

Re: Do I need to turn over a tax refund after DC in May?

despritfreya — Sat, 02 Nov 2024 14:20:31 GMT

@heather06 wrote:
My questions are: Was I supposed to supply anything to my CPA about the BK?
Not that I am aware of.
Are we allowed to keep our refund since it was for the year that I filed my BK?
Depends upon a number of factors including, but not limited to, how much and if there is an allowed exemption.
Should the refund be deposited into my husband's account or our joint account?
Depends upon what state you are in but the best thing to do is NOT deposit it into any bank account until you get the ok from the Trustee. This means you will not be getting a direct deposit into any account. Get the refund in the form of a check issued by the US Treasury (and your State department of revenue if a state refund is expected). Hold the check until you have a final answer to the question of who gets to keep the refund.
Do I need to report any of this to my lawyer or the trustee?
Sounds like you tried to reach your attorney. Send him a written notification (email or letter). Also, since your attorney is not communicating with you, call your Trustee then follow up with a written letter or email. Until you know for sure, you need to keep trying to reach out until such time as the Trustee completes his Final Accounting and your case is closed. A Discharge does not close your case.
The lawyers/trustee have had zero communication with me since DC and I'm not sure how to have my CPA complete the tax return until I get this information.
Have the CPA complete the return as he would normally do. Completing it has nothing to do with who gets to keep the refund. Also, your CPA would have no idea whether or not a bankruptcy trustee will want it. Only your attorney and the Trustee himself would have the answer.

Hope this helps.

Des.

Re: Do I need to turn over a tax refund after DC in May?

heather06 — Sat, 02 Nov 2024 16:24:50 GMT

Thank you so much @despitfreya! This was so incredibly helpful.

I have already emailed my lawyer's office several times & I now will follow up with written mail as well. Thank you for the guidance on getting a check issued and holding on to it.

Since my lawyer is not returning any of my communication - how will I know when my Trustee completes the Final Accounting and the case is closed?

I feel like I am flying blind here without any guidance on how to move forward post discharge.

Truly appreciate your response as it has given me some next steps to take. <3

Re: Do I need to turn over a tax refund after DC in May?

FicoMike0 — Sat, 02 Nov 2024 20:26:01 GMT

One possibility might be to file separately. That would make your dh refund clearly his.

Re: Do I need to turn over a tax refund after DC in May?

despritfreya — Sat, 02 Nov 2024 22:37:53 GMT

@heather06 wrote:
how will I know when my Trustee completes the Final Accounting and the case is closed?

Depending if your case is an asset or no asset case, and subject to local procedure, you will receive the Trustee's Final Report in the mail shortly after the Trustee completes his job. The case should be "closed" within 30 days after the Final Report is issued.

Des.

Re: Do I need to turn over a tax refund after DC in May?

compassion101 — Sat, 02 Nov 2024 22:57:57 GMT

What, if anything, was said about your potential tax return back before discharge?

If the answer is nothing, then that's what I would do, nothing.