Trustee Wants Tax Returns

[deedee1]

What is the name of your state?What is the name of your state? PA
We had our deposition with the trustee. He already had our tax returns from 2001,2002, & 2003. He has asked for our returns for 1998, 1999, & 2000. What gives? What does this have to do with filing for bankruptcy in 2004? If something does not "look right" to him, can he bring it up at the motion to dismiss or ask questions about our tax return from 5 years ago? Our lawyer never said a word. When I questiond him, he said it wouldn't be worth fighting against.

 

[Buck Barker]

It doesn't matter WHY he wants them. If you don't provide them he will dismiss!

 

[deedee1]

We are providing them, that's not a problem. I just wondered if this was a normal request. I've never seen anything like that mentioned in this forum. My husband's lawyer said that he is just "fishing". Let's hope he doesn't catch anything!

 

[Ladynred]

Sounds like the Trustee's got his sea-fishing pole out. Has your income changed significantly over the period of time the Trustee's looking at ?? Incomes DO go up, some dramatically, but for most of us, IF we get a cost of living increase, its not much more than 3-5% these days.

 

[deedee1]

My salary is not much more than a few years ago and my husband actually lost his job and got another at much less. Now that we have had time to think about it, we believe he is looking at our rental property. He asked both of us if we could remember what we initially received in rent when we started renting it out in 1999. My husband had said $500 or $525. I had stated that my husband basically handles the rental property but that I believe it was $500 or so. It actually was $525. So, we think we are ok - if that's why he wants the returns.

 

[InsulinRules]

DeeDee,

If I understand this correctly, only your husband is declaring bankruptcy, so stop thinking "we" and think "him". The trustee has a right to investigate hubby's finances and anything joint, but can't really seize anything jointly held.

It sounds like you've got a pretty good attorney. You've got a beast for a trustee. The beast is walking the edge of his cage snapping at you, and you, your hubby, and your attorney have to let him until he sticks his snout too far out, at which point I bet your attorney is going to slap him hard.

Certain "types" of petitioners are required to supply information for up to the previous six years (the self-employed for instance). In many cases, trustees look at the petition, and think "Right! I don't care what they had 5 years ago, they got squat now!" and don't bother asking for the paperwork. Your attorney is being smart because he is only supplying what the trustee asks for-no more, no less.

Just go with the flow and remember-the trustee is NOT getting paid anymore for asking all these questions. And if your husband has complied with every request, and the trustee STILL recommends dismissal for no other reason than "because", well, you'll have a great lawsuit against the trustee. And the judge will probably still grant a discharge. (Yes, I know trustees are protected from actions in the normal course of duties, but not from an abuse of their powers....US Trustee manual. Read it Learn it. Love it.)

 

[deedee1]

Yes, just my husband has filed; but after 8 long months of trying to be supportive and then getting a subpoena and being a part of the deposition, I guess I feel that "we" are going through this. He gave the trustee everything he has asked for, we answered truthfully and to the best of our ability at the deposition and now he has the tax returns. I guess it's just a matter of waiting for the September motion to dismiss. I wouldn't wish this on anyone.

 

[deedee1]

And The Trustee Wants More

Here's the latest. My husband provided tax returns back to 1997 to the trustee as asked. He just received a letter from his attorney -- the trustee is now asking for our tax returns from 1996 and 1995. Gee Wiz -- even the IRS doesn't require us to keep that far back, do they? I understand it's 7 years. Any thoughts???

 

[Dandy Don]

Have you thought to ask the trustee for a specific reason as to why he wants returns for these specific years?

You need to first check with the IRS to see if they would even be able to come up with those specific years--there is a limit. After you get your answer as to whether they could provide them, test the trustee by saying that you can't get them for those particular years and see what his reaction is.

 

[Ladynred]

You are correct, you are only required to keep tax returns for 7 years.
Just because this Trustee is asking for these documents, doesn't mean he's going to get them. There is a point where you can say "we don't have them" and in this case, you're not required to have them even by the IRS !

The IRS can pull up old returns for at least 10 years, but it can take quite a bit of time for them to produce really old returns (I know, I had to look into this for my EX).

I would definitely find out WHY the Trustee is digging into ancient history, 8 and 9 year old tax returns is a pretty loooooooonnnnnngg reach for any Trustee.

 

[deedee1]

Appreciate your comments. I didn't know if these returns "had" to be provided or he would dismiss the case. I know we no longer have 1995/1996 returns. I doubt our accountant does. Up until now, the lawyer has told my husband to provide whatever is asked, don't rock the boat. The last thing he needs is to have this case stretch out longer by waiting on these returns from the IRS. Motion to dismiss is in 2 weeks.

 

[InsulinRules]

While in theory a trustee has a right to examine ANY records that pertain to your financial situation from ANY time frame, the expectation is that they will confine themselves to relevant documents. For instance, if you where paying your bills up until two years ago, lost a job, and replaced it with a lower paying job, there is very little reason WHY a trustee should spend much time on 1998-it would be pretty hard to prove substantial abuse because you bought a new car in 1998 and are declaring BK in 2004


Hmmm....could be your attorney is waiting for the motion to dismiss and THEN he's going to confront the trustee before the judge, perhaps with the intent to show that the trustee has crossed the line to harassment.

What does your attorney say?