Chapter 7 Riverside Trustee Karl Anderson
Mr. Anderson is a CPA and understands tax returns well. Chapter 7 Trustee Mr. Anderson will often ask the client what the interest received on the first page of the tax return came from. In most tax returns, the amount of interest received for the year is noted on the first page of the tax return. On this line, the tax preparer is directed to note the interest received on ‘Schedule B” of the tax returns, however most tax preparers do not list the source of the interest on Schedule “B”. So Mr. Anderson asks the debtor where the interest came from.
For example if $100 is listed in interest received on the tax return, Trustee Anderson will ask what the source of the interest came from. The reason behind the question, is that banks are paying about 0.25% interest on bank deposits. So to generate $100 in interest, the principle would have to be over $40,000. Trustee Anderson has found unlisted assets by asking this question.
Practice Pointer for cases in front of Trustee Karl Anderson:
Review your client’s tax return for the interest received line on the tax return. Then ask the client for the source of that interest. The interest is shown on “1099’s” that are sent to the client. This “1099” will give the source of the interest and the source of the interest received should be placed in the petition to show the Trustee.
Another explanation for the $100 in interest received is that some banks pay clients money to open a checking account. If the client says he received the $100 for opening an account, then the account will probably not have a large balance, but Trustee Karl Anderson will still ask for proof to complete his investigation.