Chapter 13 Trustee
Eastern District of Tennessee
Southern and Winchester Divisions


TAX REFUND INFORMATION

o   If your plan requires tax refunds to be paid into the plan as additional payments, then you must timely submit a filed (Form 1040) tax return each year to the Chapter 13 Trustee. If you were not required to file a tax return during a plan year, please contact your attorney regarding the appropriate course of action for compliance with your plan.

 

o   After you have filed (Form 1040) IRS Tax Return, it takes 6 to 10 weeks and sometimes longer for the trustee to receive your tax refund. After receiving a copy of your filed IRS Tax Return and your tax refund, then it takes 2 to 3 weeks to process any tax credits that might be returned to you, if any. If we do not receive a tax return within 60 days of receipt of your tax refund, then any tax credits will be deemed abandoned and released into your case as an additional payment.

 

o   If you received your tax refund or it was intercepted by a third-party, please contact your attorney regarding the appropriate course of action for compliance with your plan. It is your responsibility to ensure tax refunds are sent to the Trustee. The Trustee will not attempt to collect these funds on your behalf. If your tax refund was intercepted by another organization, then documentation must be provided of this interception to the Trustee.

 

o   Please make sure that you have an updated mailing address with your attorney’s office. If you do not wish to have the refund mailed to your home address, we can mail the refund to your attorney’s office. You can no longer pick up your refund check at our office.

 

o   Chapter 13 cases that have been confirmed as “plus tax refunds” are meant to give an added dividend to your unsecured creditors. Before our closing department can quote a payoff on a Chapter 13 case which has the language “plus tax refunds”, we must have all copies of the years of (Form 1040) IRS Tax Returns required while you are in your Chapter 13 case and any tax refunds due the trustee.

 

o   Tax refunds do not cure missed plan payments in a “plus tax refunds” case. Keep this in mind when reviewing your receipts on the Trustwin website. Necessary receipts in the case will be plan payments, plus tax refunds, in a “plus tax refunds” case.

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