Trustee Blog

Send Bankruptcy Trustee the Tax Return

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Riverside Bankruptcy Trustee Larry Simons reminded me that the Debtors and their attroneys must send to the Bankruptcy Trustee a copy of the last filed Federal Tax return at least seven days before the first meeting of creditors.

This is found under 11 U.S.C. 521 (e)(2)(A)(i):

(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;

Rule 4002(b)(3), which implements § 521(e)(2)(A)(i), further provides:

Tax Return. At least 7 days before the first date set for the meeting of creditors under § 341, the debtor shall provide to the trustee a copy of the debtor’s Federal income tax return for the most recent tax year ending immediately before the commencement of the case and for which a return was filed, including any attachments, or a transcript of the tax return, or provide a written statement that the documentation

Fed. R. Bankr.P [Interim] 4002(b)(3).

As I sit in the bankruptcy hearings, I find that in between 20 to 30% of the cases filed, the debtor and his attorney fail to send to the bankruptcy trustee a copy of the debtor’s recent tax return. So trustees will not hear the case and some trustees will place the debtor at the end of the calendar. Other trustees will review the taxes, but it slows down the process of the meetings of creditors.

Mr. Simons further pointed out is that if the tax return is not provided, the statute is worded ” the Court shall dismiss”. § 521(e)(2)(B):

“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:

Send the Trustee the tax return at least three weeks before the hearing to avoid having to explain to the Court why the case should not be dismissed.  This will build your bankruptcy business by complying with the bankruptcy rules.

 

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