Im helping a friend with his tax return, and Im finished with it, but he just mentioned that hes thinking of filing bankruptcy, could that affect his refund, could the goverment take it away or what
is the process. Im familiar with most returns just not bankruptcy.

 
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  • userafw 5:01 pm on February 9, 2010 Permalink |

    Yes, he still has to file his tax return. Also, in bankruptcy he will still need to pay any taxes he owes for the last 3 years tax returns – generally those are not discharged in bankruptcy, as his bankruptcy attorney should be able to advise him. If he didn’t owe anything to the IRS but owed other federal agencies (usually things like child support or student loans) then those other agencies could claim part of his refund. This would be true if he is in bankruptcy or not. If he does not owe back taxes or other federal agencies, he would receive his refund as normal.

  • Spock (rhp) 5:01 pm on February 9, 2010 Permalink |

    yes, he still has to file.

    and refund, if any, is treated like any other asset he has if/when filing for bankruptcy. he’ll need it too, bankruptcy lawyers don’t work for free.

  • girlwhoknowsitstrue 5:01 pm on February 9, 2010 Permalink |

    If he files for bankruptcy, his refund is an asset and must be listed as such. Depending on the timing, it may be garnisheed, but if he files and gets his refund in a check format and cashes it at the bank, then once the money is spent there is no asset to garnishee.