Phoenix, AZ asked in Bankruptcy for Arizona

Q: We filed bankruptcy in February 2018, filed our tax return after that, trustee is asking for 2016 and 2017 tax returns.

Can he ask for our 2016 tax refund or only our 2017 tax refund? and if so, is any of it exempt under Arizona bankruptcy laws, our refunds include EIC and child tax credits. Thanks

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1 Lawyer Answer
Mallory Powers
Mallory Powers
  • Bankruptcy Lawyer
  • Phoenix, AZ
  • Licensed in Arizona

A: If you filed your bankruptcy petition in 2018, the bankruptcy estate is only entitled to your 2017 tax refund, as long as your 2016 tax refund that you received in 2017 was already spent and it was spent on reasonable and necessary items. The trustee may ask you how your 2016 tax refund was spent to determine that you are not still holding on to the funds. Unfortunately, there is no exemption for tax refunds in Arizona.

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