Local Rule RULE 2015-1: DEBTOR IN POSSESSION DUTIES

RULE 2015-1 DEBTOR IN POSSESSION DUTIES

(a) Monthly Statement of Operation Required in a Chapter 7 (Operating), Chapter 11 and Chapter 12 Case. The operating report mandated by §§ 704(a)(8), 1106 and Fed. R. Bankr. P. 2015(b) must be filed monthly and, in addition, must be served upon the United States trustee, any governmental unit charged with responsibility for collection or determination of any tax arising out of the operations, and shall be served upon any official committee or its attorney.

(1) Signature. An operating report filed in accordance with paragraph (a) of this Rule must be signed by the debtor in possession, or if applicable, the chapter 7 trustee or § 1104 trustee. By signing the operating report, the debtor in possession or trustee verifies the accuracy of the information contained therein.

(b) Monthly Statement of Operation Required in a Chapter 13 Business Case. The operating report mandated by Fed. R. Bankr. P 2015(c)(1) must be filed monthly and, in addition, must be served upon the United States trustee, and any governmental unit charged with responsibility for collection or determination of any tax arising out of the operations.

(1) Signature. An operating report filed in accordance with paragraph (b) of this Rule must be signed by the debtor. By signing the operating report, the debtor verifies the accuracy of the information contained therein.

(c) Requirements for a Chapter 12 or Chapter 13 Debtor Engaged in Business. If a chapter 12 or 13 debtor is engaged in the operation of a business enterprise, including a family farm pursuant to § 1201, and is required to collect tax or for which the debtor incurs tax liability in the ordinary course of the debtor's business, the debtor shall:

(1) Provide the trustee a summary of business operations on such form as promulgated by the trustee or a copy of the debtor's most recent federal tax return when requested by the trustee and in such intervals as required by the trustee;

(2) Maintain a bank account that serves solely as a separate tax account ("Tax Account") for the deposit of all tax funds (including, but not limited to, funds held in trust for an employee's withholding tax, sales tax, and employer business tax, with the exception of income taxes) that may be collected by the debtor and for which the debtor may become liable during the pendency of this case. Such tax funds are to be withdrawn from the Tax Account only for the remittance to the appropriate taxing authority or to a federal tax depository;

(3) Contemporaneous with the payment of any salary paid to an employee of the debtor, deposit that portion of such salary as is required to be withheld for social (4) security tax and the employer's portion of social security tax and disability and unemployment insurance taxes to the Tax Account;

(5) If the debtor is required to collect sales tax, deposit the sales tax in the Tax Account not later than the Monday following each week for that week's sales tax liability;

(6) Deposit any other tax that the debtor is required to collect, or for which the debtor incurs liability in the ordinary course of the debtor's business (such as federal excise taxes) into the Tax Account not later than Wednesday of the week following the week in which such tax were collected or in which the liability was incurred;

(7) During the pendency of the case, timely file all required federal and state tax returns;

(8) During the pendency of the case, make required periodic deposits of federal and state taxes to a tax depository and provide the appropriate taxing authority with verification that such deposits were made within three (3) days from the date of any such deposit; and

(9) The debtor shall provide proof of compliance with paragraph (b) of this Rule upon request of the trustee.

Comment This Rule addresses the requirement of filing monthly operating reports in a chapter 7 case when a business is authorized to be operated, in a chapter 11 and 12 case, and in a chapter 13 business case. Monthly Operating Report forms are located at: http://www.justice.gov/ust/r02/index.htm Pursuant to Fed. R. Bankr. P. 5003(e), counsel is referred to the Clerk's registry for the addresses for the filing of tax returns and remittance of payments.