irs, and bonus ch7

[helpustoday]

What is the name of your state? ohio

We have filed a ch7 bankruptcy and our 341 is in Dec 12. The first question is this, Since 1997 we have been fighting with the IRS over monies owed for tax returns. We have not filed in 5 years because of this. Will this affect our bk? Will our trustee have any problems with this? Even if we filed we would not have a return because the IRS would take the money. And I am not even sure we would get a return. (Long story).. Second question is my husband gets a bonus check just about the same time as this meeting, but it is considered his pay. Do we have to tell about the check? we have no idea how much it will be. Thing is we are broke and don't have a penny to our names when all the bills are paid. We won't have any money for christmas for the grandbabies if they take it. Is this bonus considered exempt? as it figures into our gross income. Our hospitialization is paid out of it and all his work related expenses. Sometimes there is nothing left when all the expenses are taken out. Need some advice...

[moburkes]

You should file a tax return every year, even if you can't pay (sorry to say that). You would have been able to include most of the money you owe to the IRS in your bankruptcy, but one of the rules is that you must have filed the return before declaring bankruptcy, then there is another rule about what year the owed taxes are for. But since you didn't file a return, you won't be able to discharge the debts in the bk.

Not sure about the bonus.

[Ladynred]

It would be a BAD idea to hide the bonus. If he got a bonus last year, that amount SHOULD have been included in your gross income off your W-2. His 2005 income should ALSO include that bonus amount and your monthly income averaged from that total. If you filed under the new law, then income is based on an average of the 6 months prior to your filing date.

If the bonus is needed for NECESSARY expenses AND you can get the amount within your exemptions, then you might be able to keep all or part of it. If you can't exempt it, then the Trustee is likely to take it, sorry