Hello, I like the answers you have given so far in regards XXXXX XXXXX case involving the retitution check and the amended tax return I am thinking of filing for 2008 in regards XXXXX XXXXX theft loss. I can also understand the need for a local attorney, but I am finding that attorneys have varying opinions. I am resigned to the fact that I am turnig over the funds from the restitution as that is considered part of the estate, but I think that the "loss" that occured and would result in the tax refund was incurred when the restitution check was issued after discharge. The attorney that I had retained quit last week due to the following opinion and I would like to know if you could add anything please. He feels that the full amount of the refund and not just a pro rata to the date of filing is part of the estate. we filed on 1/8/08.
Section 541 of the Bankruptcy Code
is clear that property of the estate includes “all legal or equitable interests of the debtor in property as of the commencement of the case”, subject to a few exceptions that do not apply in your situation. If there was any possibility, as of the petition
date, that you might eventually get a tax refund due to circumstances that occurred before filing; that possibility of payment generally constitutes an “interest”. The interest may have been a contingent interest—in other words, there may have been no guarantee you would actually get it. It may also have been unliquidated—in other words, you may not have known at the time how much money you could actually get. But it was an interest nonetheless. You cite the date of January 1, 2009 as the date the interest arose. I would be more inclined to view that date as being (approximately) the date your interest became noncontingent (you were sure you’d qualify for the refund based on the loss) and liquidated (you knew, or could reasonably calculate, exactly how much that refund was gong to be). But I see the interest as having existed ever since the date you suffered the loss that qualified you for the tax refund. As much as I wish it to be otherwise, interests—even very vague interests—do not generally pop into and out of existence at our convenience.
The bankruptcy paperwork requires the disclosure of even contingent, unliquidated interests (specifically including tax refunds—see Schedule B, line 21). I believe very strongly that this tax refund must be disclosed under the plain language of those forms; which is why we insisted on disclosing the restitution check’s existence to the trustee
and also why I told you we would do no future work on the case without your authorization to make a full disclosure of the tax refund.