Handling Postpetition Tax Refunds in Ch 13
Posted: Tue May 03, 2011 1:18 pm
1.No
2. Yes
3. ASAP.
4. MOMOD doesn'trelieve debtor from tax refundturnover requirement,
butextraordinary expenses can be providedfor under modified plan as usual.
Peter M. Lively, JD, MBA
The Personal Financial Law Center* Culver City & Costa Mesa * 800-307-DEBT
________________________________
To: cdcbaa@yahoogroups.com
Sent: Tue, May 3, 2011 12:20:53 PM
Subject: [cdcbaa] Handling Postpetition Tax Refunds in Ch 13
I have the following questions regarding handling of postpetition tax refunds in
confirmed Ch 13 cases:
1. If a debtor who has committed "all tax refunds" to their Ch 13 plan receives
a postconfirmation federal tax refund and owes postconfirmation state income
tax, can the debtor use a portion of the federal refund to pay the state tax,
then turn over the net proceeds to the Trustee with a letter of explanation?
2. If the answer to #1 is "no," then would it be advisable for the debtor to
turn over the federal tax refund, then file a Proof of Claim on behalf of FTB in
order to pay the postpetition state income taxes through the plan?
3. Is there an explicit deadline, or "best practice" for timing of turning over
tax refunds to the Trustee?
4. If debtor (against advice of counsel) uses tax refund money for personal use
(such as for higher than budgeted medical or home repair expenses), will most
judges entertain a retroactive motion to modify if the expenses are documented,
reasonable and justifiable?
Thanks in advance for any thoughts on these issues.
1. No
2. Yes
3. ASAP.
4. MOMOD doesn't relieve debtor from tax refund turnover requirement, but extraordinary expenses can be provided for under modified plan as usual.
Peter M. Lively, JD, MBA
The Personal Financial Law Center * Culver City & Costa Mesa * 800-307-DEBT
From: clifford_bordeaux <cliff@bordeauxlaw.com>To: cdcbaa@yahoogroups.comSent: Tue, May 3, 2011 12:20:53 PMSubject: [cdcbaa] Handling Postpetition Tax Refunds in Ch 13
I have the following questions regarding handling of postpetition tax refunds in confirmed Ch 13 cases:1. If a debtor who has committed "all tax refunds" to their Ch 13 plan receives a postconfirmation federal tax refund and owes postconfirmation state income tax, can the debtor use a portion of the federal refund to pay the state tax, then turn over the net proceeds to the Trustee with a letter of explanation? 2. If the answer to #1 is "no," then would it be advisable for the debtor to turn over the federal tax refund, then file a Proof of Claim on behalf of FTB in order to pay the postpetition state income taxes through the plan?3. Is there an explicit deadline, or "best practice" for timing of turning over tax refunds to the Trustee? 4. If debtor (against advice of counsel) uses tax refund money for personal use (such as for higher than budgeted medical or home repair expenses), will most judges entertain a retroactive motion to
modify if the expenses are documented, reasonable and justifiable?Thanks in advance for any thoughts on these issues.
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