2010 Tax Return Imperative in Chapter 13

Got to file the 2010 tax return to get your Chapter 13 plan confirmed
is my message to clients filing bankruptcy.

But it isn’t due til April 15th and I usually get an extension, comes the reply.

Not this year. A case filed at any point in 2011 includes tax liability for 2010, since the tax is due as of the close of the tax year.   A Chapter 13 plan has to pay priority claims in full.  How can a Chapter 13 trustee assess feasibility or recommend confirmation if she doesn’t know what taxes may be due for 2010?

Practitioners should be aware of  §521(f) which allows the trustee to  require the debtor to provide the tax returns for the tax years ending  within the three years prior to the commencement of the case.

If the debtor uses a tax preparer, this can be your chance to request that  the preparer evaluate the adequacy of the client’s withholding for the current year.  It’s worth seeing if the number you’ve used in the means test for future taxes is consistent with any changes in the debtor’s income or in available deductions.  A decision to surrender a house will eliminate the mortgage interest deduction for this year.


  1. The tax amount used in for the means test . . . you really do delve into the details.  Very helpful, thank you.