Local Rule RULE 6070-1: TAX RETURNS AND TAX REFUNDS

RULE 6070-1 TAX RETURNS AND TAX REFUNDS

(a) Offset of Income Tax Refund. The Internal Revenue Service is authorized: (1) to make income tax refunds, in the ordinary course of business to the debtors in Chapter 7 and Chapter 13 cases, unless directed otherwise in writing by the trustee or the Court, and (2) the Internal Revenue Service is authorized to offset any refund against any taxes due to the United States.

(b) IRS Duty to Notify Court and Trustee. Where the Internal Revenue Service has on file with the Bankruptcy Court a proof of claim covering tax liabilities of the debtor, the IRS must – in letter form, or by amended claim – notify the Bankruptcy Court and the trustee of any and all offsets made pursuant to authorization in all such cases.

(c) IRS Assessment of Tax Liabilities. The Internal Revenue Service will assess tax liabilities which are due in all cases on voluntarily filed tax returns.

(d) Modification of Stay. The stay afforded by 11 U.S.C. § 362 is modified to the extent provided by this rule.

(e) Delivery of Tax Returns and Tax Refunds in Confirmed Chapter 13 Cases. All debtors having plans confirmed that provide for less than full payment to holders of unsecured claims shall by May 15 of each year: (1) submit to the standing trustee copies of federal and state income tax returns filed during the pendency of the case; (2) deliver federal and state income tax refunds to the standing trustee for distribution to creditors; and

(3) If an extension of time for filing income tax returns is filed in lieu of a tax return: (i) a copy of the extension request shall be submitted to the Chapter 13 trustee no later than May 15 of each year a case is pending; and (ii) copies of the returns shall be submitted to the Chapter 13 trustee when filed with the taxing authorities.