01 Apr 2015

Calculating the Non-Estate Portion of Tax Refunds in CaseLink Office

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Calculating the Non-Estate Portion of Tax Refunds in CaseLink Office

Tax refunds intercepted from the IRS typically include a portion of funds that were paid in taxes post-petition. These funds are not estate funds and must be refunded to the debtor(s). The Tax Refund Intercept Letter in CaseLink Office will calculate estate and non-estate funds, making it simple to calculate the refund.

Once the tax refund has posted to the bank account, a check should be issued to the debtor(s) for their portion. This should not wait until the creditor distribution. Some offices create a claim for the funds, although this is not required.

The steps are simple. You begin by writing the check to the debtor(s). Enter the amount of the refund, and the payee information. Then, select the 8500 UTC code, which will automatically default the funds to non-compensable.

Important! Make sure to check the Other Funds to Debtor checkbox to ensure proper reporting on paragraph 4 of the TFR. This section of the TFR is very specific. The line item is for reporting surplus funds, or any non-compensable funds other than exemption funds.


The funds will also show on Form 2 as 8500-002 as they are marked as non-compensable. The flagged checkbox in the ledger transaction is the method used to report the disbursement on the Other Payments to Debtor line.

The TFR must reflect the funds paid to the debtor. If you have followed the steps listed above, the transactions will be properly matched when the TFR is generated.