Providing Tax Documents to the Bankruptcy Trustee

When you file for bankruptcy, you’ll provide tax documents to the bankruptcy trustee—the official appointed to oversee your case—along with other documents required by section 521 of the bankruptcy code. The trustee will use the tax documents to verify your income and, to some extent, your expenses and other financial transactions.

What Are 521 Documents in Bankruptcy?

A large part of filing for bankruptcy involves providing financial information and verifying it with supporting documents and through testimony that you’ll give at a hearing called the 341 meeting of creditors. To ensure a productive meeting, you’re required to send the trustee the 521 documents beforehand (or file them with the court, depending on local practices).

Here’s a minimal list of what you’ll need to provide:

• two months of paycheck stubs
• two months of bank statements, and
• copies of filed Federal tax returns (more below).

Most trustees will ask for additional documents, such as:

• retirement, pension, and investment account statements
• profit and loss statements (if you own a business)
• up-to-date mortgage and vehicle loan billings

• proof of the value of your vehicle or other property
• a divorce decree or settlement, and
• receipts proving that you’ve incurred expenses.

You’re obligated to comply with reasonable document requests. (Learn more about the documents you must provide to the bankruptcy trustee or court.)

Tax Documents Required by Bankruptcy Law

Most people are somewhat uncomfortable giving out tax information—and understandably so. But you must submit certain tax documents to the bankruptcy trustee. Here's what the law requires.

Copies of Tax Returns Filed Before the Bankruptcy

If you file for Chapter 7 bankruptcy, you must provide to the bankruptcy trustee a copy of your tax return for the most recent tax year for which a return was filed (but plan on providing the two most recent returns).

A trustee needs more in a Chapter 13 bankruptcy to determine whether you owe taxes (many taxes must be paid in full in the plan). So, in a Chapter 13 bankruptcy, you’ll need to show that you’ve filed returns for the four previous years.

If you do not timely provide your tax return, the meeting cannot take place. The trustee has the discretion to reschedule the meeting or to ask the court to dismiss your bankruptcy case altogether.

In both cases, you’ll need to provide the returns to the trustee at least seven days before the 341 meeting of creditors.

Copies of Tax Returns You Filed After the Bankruptcy

If the Court, United State Trustee, your bankruptcy trustee, or another party in interest requests it, you must provide copies of any tax returns filed while your bankruptcy is pending. This rule includes:

• returns which came due after the bankruptcy filing
• returns you filed post-petition for a tax period which ended within the three years preceding the filing of your bankruptcy case, and
• any amended returns for those time periods.

This requirement is only triggered if someone makes a formal request. In most cases, no one makes the request—which means you don't have to file post-bankruptcy tax return documents with the bankruptcy court.

Other Tax Documents Requested by the Trustee

Trustees commonly request that debtors provide additional tax documents for the trustee’s review. The trustee must investigate the financial affairs of the debtor, and the debtor must cooperate and turn over all financial records to the trustee.

Tax documents, such as personal income tax returns, business income tax returns, W-2's and 1099's, and depreciation schedules may provide the trustee with information on:

• the debtor’s income and expenses
• losses or reductions in income
• transfers of property, or
• ownership of business interests.

Annual Income Tax Returns in Chapter 13

In a Chapter 13 bankruptcy, you must contribute all of your disposable income to the Chapter 13 plan for three to five years. It’s quite likely that your income will change over this period. The trustee uses the returns to monitor your income and to determine whether your plan should be modified to include additional post-petition income not anticipated at the plan confirmation. (Learn more about the Chapter 13 repayment plan.)

The procedure varies by court and trustee. Some trustees make case-specific requests for the returns, some include language in the confirmation order requiring yearly returns, and, in some areas, the requirements are outlined in the local rules.