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Chapter 7 Trustee Intercepts Exempt Tax Refund!
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In that case, trustee is only entitled to half the refund as half of it
was generated after the case was filed, and is thus a postpetition asset.
Note to Dennis: a new operating system on my computer now does spellcheck
for me. Spellcheck doesn't like "postpetition." Can I put Microsoft in
touch with you for a style tutorial?
John D. Faucher
Faucher & Associates
The post was migrated from Yahoo.
Hi Link,
Tax return was for tax year ending 2011. Debtor filed his return about March, 2012 and was expecting the refund to come by mail around April, 2012. Debtor contacted the IRS repeatedly and they just got back to him this week via mail--mailing him the photocopy of the check made payable to the Chapter 7 Trustee.
>
> Ty, I think we need to know the timeline a bit better. To which tax year
> does this refund pertain? When was the return filed? When did the debtor
> get the photocopy of the check?
>
> John D. Faucher
> Faucher & Associates
> Reply-To:
> Date: Thursday, May 24, 2012 2:33 PM
> To: "cdcbaa@yahoogroups.com"
> Subject: RE: [cdcbaa] Chapter 7 Trustee Intercepts Exempt Tax Refund!
>
>
>
>
>
>
> I would normally do the same, but Im not sure the court would be
> sympathetic to changing exemptions after the trustee had already taken
> possession of what was previously listed as non-exempt. Humm.
>
>
> Link Schrader, Attorney
> Law Office of Link W. Schrader
>
>
> Leventhal Law Group, P.C.
> Sent: Thursday, May 24, 2012 1:51 PM
> To: cdcbaa@yahoogroups.com
> Subject: Re: [cdcbaa] Chapter 7 Trustee Intercepts Exempt Tax Refund!
>
>
>
> I agree with everything you said with the exception of your last statement.
>
>
>
> If an asset is exempt it is exempt. The Trustee can not pick and choose
> what they wish. I often will choose an item that is hard to sell for the
> Trustee if I run out of exemptions. I do this because if it is hard to sell
> the Trustee will likely abandon it.
>
>
>
>
>
> Jonathan Leventhal, esq.
>
> Leventhal Law Group, P.C.
>
> 818-347-5800
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>
> On May 24, 2012, at 1:47 PM, "Link W. Schrader"
> wrote:
> >
> >
> >
> > If the trustee was ignoring my requests to release exempt funds to the debtor,
> > I would:
> >
> > 1) Make sure everything else was right in the case;
> >
> > 2) Document my attempts to resolve the situation directly with the trustee;
> >
> > 3) File a motion asking for an order directing the trustee to release
> > exempt funds to the debtor. The motion would at least include the amended
> > schedules B and C, as well as evidence on my communication attempts with the
> > trustee.
> >
> >
> > If the debtor is going to have non-exempt property and owe the trustee cash, I
> > think it doesnt matter if the trustee retains the tax refund even if it was
> > exempted. It would not make good sense for the court to require the trustee
> > to return cash in hand where there was other cash more difficult to obtain
> > that the debtor had not yet paid. So before filing the motion I recommend
> > making sure the debtor owes nothing to the trustee.
> >
> > Best Regards,
> >
> >
> > Link Schrader, Attorney
> > Law Office of Link W. Schrader
> >
> >
Of
> > Tyson
> > Sent: Thursday, May 24, 2012 1:35 PM
> > To: cdcbaa@yahoogroups.com
> > Subject: [cdcbaa] Chapter 7 Trustee Intercepts Exempt Tax Refund!
> >
> >
> >
> > Hi Everyone,
> >
> > Got a strange situation here. Debtor filed his Chapter 7 case in June, 2011. I
> > claimed 1/2 of his refund as exempt. 341(a) was held in July but has not been
> > concluded, around December, 2011 amended debtor's Schedule C to exempt ENTIRE
> > income tax refund. TE does not respond to any of my inquiries.
> >
> > Debtor timely filed his 1040 return but did not receive his refund. IRS just
> > mailed him a photocopy of his refund check c/o Chapter 7 Trustee!
> >
> > Any thoughts on what I should do?
> >
> > Tyson Takeuchi
>
The post was migrated from Yahoo.
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Ty, I think we need to know the timeline a bit better. To which tax year
does this refund pertain? When was the return filed? When did the debtor
get the photocopy of the check?
John D. Faucher
Faucher & Associates
Reply-To:
Date: Thursday, May 24, 2012 2:33 PM
To: "cdcbaa@yahoogroups.com"
Subject: RE: [cdcbaa] Chapter 7 Trustee Intercepts Exempt Tax Refund!
I would normally do the same, but Im not sure the court would be
sympathetic to changing exemptions after the trustee had already taken
possession of what was previously listed as non-exempt. Humm.
Link Schrader, Attorney
Law Office of Link W. Schrader
The post was migrated from Yahoo.
It sounds like you are talking about the 2010 refund. If so, and you had enough to exempt the entire amount as of the petition date, I'd just ask for it. If the Trustee does not comply, then file a motion to get an order from the court. Maybe I'm missing something . . .
Sent from my iPad
The post was migrated from Yahoo.
If the trustee was ignoring my requests to release exempt funds to the debtor, I would:
1) Make sure everything else was right in the case;
2) Document my attempts to resolve the situation directly with the trustee;
3) File a motion asking for an order directing the trustee to release exempt funds to the debtor. The motion would at least include the amended schedules B and C, as well as evidence on my communication attempts with the trustee.
If the debtor is going to have non-exempt property and owe the trustee cash, I think it doesn't matter if the trustee retains the tax refund even if it was exempted. It would not make good sense for the court to require the trustee to return cash in hand where there was other cash more difficult to obtain that the debtor had not yet paid. So before filing the motion I recommend making sure the debtor owes nothing to the trustee.
Best Regards,
Link Schrader, Attorney
Law Office of Link W. Schrader
The post was migrated from Yahoo.
Hi Everyone,
Got a strange situation here. Debtor filed his Chapter 7 case in June, 2011. I claimed 1/2 of his refund as exempt. 341(a) was held in July but has not been concluded, around December, 2011 amended debtor's Schedule C to exempt ENTIRE income tax refund. TE does not respond to any of my inquiries.
Debtor timely filed his 1040 return but did not receive his refund. IRS just mailed him a photocopy of his refund check c/o Chapter 7 Trustee!
Any thoughts on what I should do?
Tyson Takeuchi
The post was migrated from Yahoo.