[CNYBBA-LISTSERV] Random Audits start 10/20/06

[Lynn Harper Wilson]

I was at a conference last week and one of the speakers was the U.S. Trustee
from Region 6.  He gave some information about the upcoming audits, that I
thought you might be interested in.  (I also heard this at the NACTT
conference in Denver but didn't write it down then.)  I'm sure Guy will let
us know if I have any of this information wrong.
 
The audits are going to start on 10/20/06 and one out of every 250 Chapter 7
& 13 cases will be audited.  The cases will be selected at random by a
computer program.  A team in Washington will notify the auditor when
documents are filed in the case.  The local UST will send an audit
notification to the debtor (& atty, I presume) & Trustee with a list of
documents for the debtor to produce, a form for the debtor's attorney to
allow direct contact with the debtor, and an information sheet.  A notation
will be made on CM/ECF that the case is being audited, and the Court Clerk
will not close the case until the audit is completed.
 
The debtor will have 21 days to provide the requested documents.  Then the
auditor will have 21 days to complete the audit, although they make take a
little longer.  The whole process should be completed within 70 days of the
petition being filed.  "Targeted audits" will also be selected by the
Washington D.C. team.
 
The audit will be a "desk audit."  Two commercial database searches will be
performed, and the debtor will be given an opportunity to explain any
apparent "material misstatements" in the petition.  They do not contemplate
having face-to-face meetings or site visits.
 
The information required will be paystubs for six months; tax returns for
two years with attachments; account statements for six months before the
petition was filed and the month the petition was filed; copies of divorce
decrees, property settlements, and child support documents.  They will only
be looking at the original schedules, not amendments.  They will not say
what is on the list of "material misstatements" they are looking for.
 
Reports will be filed with the Bankruptcy Court.  One of three kinds of
reports will be filed:  1) report that discloses material misstatements, 2)
report of no material misstatements, or 3) report of no audit (i.e. case was
dismissed before audit was completed or debtor failed to coopertate).  The
clerk will send notice to creditors if material misstatements were
discovered, although the notice will not say what the material misstatements
are.  The creditor can look at the report on CM/ECF if they want to know.
 
"Enforcement options" include:  criminal referral, objection to discharge or
action to revoke discharge, motion to dismiss with prejudice, objection to
confirmation, motion to modify plan (or request for Chapter 13 Trustee to do
it), motion to convert, avoidance actions (by panel Trustees), discovery
(motions to compel), sanctions against attorney, motions to compel amended
schedules.
 

***************************************
Lynn Harper Wilson, Staff Attorney
Standing Chapter 12 & 13 Trustee's Office
Syracuse, New York
    e-mail:  <mailto:lhwilson at cnytrustee.com> lhwilson at cnytrustee.com
        web site:  <http://www.cnytrustee.com/> http://www.cnytrustee.com 

 
-------------- next part --------------
An HTML attachment was scrubbed...
URL: /pipermail/cnybba_cnybba.org/attachments/20060918/4b41281f/attachment.html