INSTRUCTIONS CONCERNING TAX REFUNDS
The Trustee is entitled to collect and administer your tax refunds and if any other funds are due from other assets of the estate, such as non-exempt bank funds, to deduct the balance due before returning any remaining funds to you. It is your responsibility to prepare and file your tax returns the way you normally would and provide the Trustee with copies of the federal and state tax returns as soon as they are completed, but no later than the deadline issued by the IRS. You understand that you should NOT do a Rapid Anticipation Loan to receive your refund faster and that if you do, you will not be reimbursed for the fee incurred in doing so. You further understand you will not receive credit for using your refund to pay your preparation fees. If you request an extension of time to file your tax returns, you must provide a copy of the request to the Trustee.
HOW TO GET YOUR TAX REFUNDS TO US:
Upon receipt of an email address for Debtor, our office will send an email invitation to you that will be good for 7 days. You will use the link provided in that invitation to upload pdfs or pictures to the software system following the prompts. Please email roberta@ladfislaw.com advising that the tax returns have been sent. If you do not have the ability to upload these documents securely in this manner, the only other option is to mail copies to our office or to get them to your attorney to upload to us.
The Trustee will be requesting that the Internal Revenue Service send your refund check directly to her office. If you receive those funds directly from the Internal Revenue Service, either by check or direct deposit to any account, YOU MUST TURN THOSE FUNDS OVER TO YOUR ATTORNEY OR DIRECTLY TO THE TRUSTEE unless you have been advised otherwise in writing by the Trustee’s office.
It may be necessary for you to turnover to the Trustee your state refund and you have an obligation to talk to the Trustee’s office before spending those funds UNLESS otherwise advised in writing by the Trustee’s office.
If after the filing of your tax returns, should an amendment become necessary at a later date, you must forward copies of that amended return to the Trustee immediately.
Pursuant to 18 U.S.C. ?152, a person who knowingly and fraudulently conceals from a Trustee any property belonging to the estate of the Debtor is guilty of a federal crime punishable by fine and imprisonment of not more than five (5) years. Further, to the extent that you conceal a property of the bankruptcy estate from the Trustee or fail to follow any lawful order of the Court, the Trustee may seek to have your discharge denied or revoked. A denial of your discharge will not affect the Trustee’s right to administer the property on behalf of the creditors. The Trustee may seek both the turnover of the property and a denial of your discharge should you conceal property of the bankruptcy estate.
Trustee contact information for mailing tax returns and refund checks:
Rebecca H. Fischer, Trustee
Laderer & Fischer, P.C.
525 E. Colfax, Unit 101
South Bend, IN 46617
Phone: 574-284-2354 email: roberta@ladfislaw.com
TAX RETURN AND REFUND "DO'S AND DON'TS"
- DO mail, deliver or email to your attorney signed and dated copies of' your entire federal and state return to your attorney immediately upon filing. If requesting an extension from the IRS to file your returns, please inform your attorney. Your attorney will forward the tax returns to our office and file any applicable exemptions. OR you may upload the tax returns to the Trustee's collaborative following the instructions under the pro se debtor tab.
- DO also include your W2 if you have filed your taxes with a non-bankruptcy filing spouse so that we can determine their portion of the refund that is exempt.
- DO confirm that your attorney has sent the tax returns to the trustee. (the sooner this is done the more quickly a determination will be made on any funds that will be returned to you). This is a great time to also confirm that the Trustee wasn't waiting onany additional documentation, such as bank statements. The Trustee will NOT issue your exemption until all requested and / or required documents have been received.
- DO make sure to read the letter the letter the trustee will send to you and your attorney advising if the tax refunds are going to be utilized to pay your creditors. If they are not, the trustee will give you written permission to negotiate the checks and use the proceeds however you want.
- DO be sure, if you have been instructed to turnover your tax refund check(s), they are to be mailed immediately upon receipt to the Trustee, UNENDORSED.
- DO contact the Roberta at the Trustee's office for further instructions on how to proceed if you receive the funds electronically in your bank account, at roberta@ladfislaw.com or by calling the office at 574-284-2354.
- DO confirm with your attorney that the refunds are scheduled and any unclaimed available exemptions have been filed immediately by your signing an amended schedules B and C. The trustee will not consider any exemptions not filed with the court including requests for abandonment of the refunds contained in any type of correspondence.
- DO look for your exempt portion of tax refunds once the funds are received and the check clearthe trustee estate bank account (approximately 24 - 48 hours after deposit).
- DO contact your attorney if you have any questions about this process.
- DO contact roberta@ladfislaw.com to check on the status of your refund if it has been two months since you filed your return.
- DO NOT assume because you receive your check or electronic deposited funds from the IRS that you can keep those unless our office has told you to keep them. You will need to turnover funds unless otherwise instructed.
- DO NOT endorse or cash the check(s) if you have been instructed to forward those checks.
SOME NOTES ABOUT TAX CASES:
- We will file a tax intercept request with the Internal Revenue Service which is supposed to send your refund directly to our office. It will usually appear on the IRS website as "received and being processed". They generally do not 'update' that status when they issue the check. Generally, those cases that have non-filing spouses will NOT be intercepted and will be received by the debtor.
- It can take a substantial amount of time for our office to receive tax refunds through the interception process. If is NOT uncommon for us to wait four months after the returns are filed to receive the refund. The Trustee's office has NO control over how long that process takes. Don't count on having that refund by any specific time period. However, filing earlier than later in the season will improve your chances of receiving your refund quicker.
- In the past, debtors have gotten confused on the tax credits that are exempt. If claimed properly on Schedule C, Earned Income Credit is exempt. This is NOT the same as child tax credit which is NOT exempt. In the past, returns with Earned Income Credit did not start getting processed until 2 weeks into February. This may delay the refund of any exempt funds to you.