Trustee Blog

Failure to Provide Tax Returns (11 U.S.C. 521(b)(2)(A)(i)

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Failure to Provide Tax Returns (11 U.S.C. 521(b)(2)(A)(i).

Riverside Chapter 7 Trustee Arturo Cisneros reminds attorneys and debtors on almost every hour of his calendars that they have a duty to send to the assigned Chapter 7 trustee a copy of the most recent filed tax return at least seven days prior to the meeting of creditors.

When the law changed in 2005 with the advent of BAPCPA, one of the major changes was that the debtor now had a duty to send the recent tax return to the Chapter 7 trustee. This Bankruptcy Code section is 11 U.S.C. 521(b)(2)(A)(i):

(2)(A) The debtor shall provide—

(i) not later than 7 days before the date first set for the first meeting of creditors, to the trustee a copy of the Federal income tax return required under applicable law (or at the election of the debtor, a transcript of such return) for the most recent tax year ending immediately before the commencement of the case and for which a Federal income tax return was filed; and

(ii) at the same time the debtor complies with clause (i), a copy of such return (or if elected under clause (i), such transcript) to any creditor that timely requests such copy.

If the debtor fails to comply with clause (i) or (ii) of subparagraph (A), the court shall dismiss the case unless the debtor demonstrates that the failure to so comply is due to circumstances beyond the control of the debtor.

Practice Pointer

Please note the last section of the above statute: “The court shall dismiss the case unless the debtor demonstrates that the failure to so comply [with the sending of the tax return] is due to circumstances beyond the control of the debtor.” The important words are “The court shall dismiss…”

The takeaway from this section is to send to Chapter 7 Riverside Trustee Arturo Cisneros and all the other trustees, the taxes at least three weeks before the hearing in order to ensure compliance.

Practice Pointer:

For a video on the  meeting of creditors hearing location at 3801 University Ave., Riverside, CA 92501…see my website at www.bkmike.com

 

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