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About Mark J. Markus- California Bankruptcy Attorney
Expertise
Mark J. Markus is a Los Angeles attorney who has practiced exclusively bankruptcy law in California since 1991 and is rated A+ by the Better Business Bureau. He represents debtors, creditors, and Trustees in Chapter 7, Chapter 11, and Chapter 13 of the bankruptcy code throughout California.

Experience
Visit http://www.bklaw.com for more information on bankruptcy in general and Mark J. Markus in particular. Many questions are answered on the web page (hint, hint).
The Markus webpage also contains more information on
business bankruptcy,
chapter 7 bankruptcy,
chapter 11 bankruptcy,
chapter 13 bankruptcy,
Frequently Asked Bankruptcy Questions

Also visit our new bankruptcy blog for interesting articles and much more.

Education/Credentials
J.D., University of Arizona 1990. B.A. Economics, California State University, Northridge 1986. For more details please click here

You are here: Experts > Business > Corporate Law > Bankruptcy Law > Chapter 7 and 2005 Tax refund

Bankruptcy Law - Chapter 7 and 2005 Tax refund

Expert: Mark J. Markus- California Bankruptcy Attorney - 10/26/2009

Question
QUESTION: I have filed an amended tax return for 2005 for a refund. However the IRS has denied it and I have responded with an opposition two months ago. So now it's in limbo. Will this affect the filling of Chapter 7 NOW, assuming that I qualify for all other aspects of Chapter 7?

ANSWER: No, as long as you list the potential refund as an asset I don't see how it would affect anything.

http://www.bklaw.com/

---------- FOLLOW-UP ----------

QUESTION: 1)Let's say if I receive the 2005 tax refund two months after the discharge, will that refund still be the estate of the trustee and be distributed among the creditors? Being that the refund is large enough to pay off the creditors. Another words, is there a time limit for the tax refund to still be considered an estate of the trustee?

2)I received a tax refund for 2008 in May and have lost in gambling most of it. It's a five digit refund and I was trying to make some quick money to pay off all my debts, but ended up the reverse. Will that be a problem filing Chapter 7? I know you need proof for everything. But giving cash to the dealers in exchange for chips does not give me any receipts.

Answer
When you receive the refund is irrelevant. It's property of the estate if you're entitled to receive it, and that occurred in 2005, so if you don't have any exemptions available under applicable laws then the Trustee is entitled to it in a Chapter 7 case. For more on exemptions, see http://www.bklaw.com/exemptions.html

As to your second question, it's possible it could be a problem. Failure to adequately explain any loss or deficiency of assets is grounds for denial of discharge, and record keeping is part of that equation. If you don't have a history of gambling, such as listing winnings and/or losses on prior years tax returns, you could have a problem, but that's a complicated issue and beyond the scope of this service. You need to discuss this with a qualified bankruptcy attorney.

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