Economic Stimulus Act of 2008

The IRS recently began issuing stimulus payments to qualified individuals under the Economic
Stimulus Act of 2008. In deciding whether to seek turnover of the stimulus payment in any case,
trustees should consider all relevant circumstances. These circumstances include: the amount of the
stimulus payment; any interest of a non-debtor spouse in the stimulus payment; the cost to the estate
of recovering and administering the stimulus payment, including litigation with debtors who may
seek a judicial determination; the extent to which recovering the stimulus payment will enable
creditors to receive a meaningful distribution; and the applicability of state and federal exemptions.

We are informed that the IRS’s legal interpretation is that no portion of the stimulus payment would
become estate property in a case filed on or before February 13, 2008, the enactment date of the
Stimulus Act. The IRS also asserts that in any case filed after February 13, 2008, the debtor’s entire
stimulus payment would become estate property (subject to any right of offset). Any chapter 7
trustee who deems it appropriate to seek to recover from the IRS a stimulus payment that has not
already been paid to the debtor should use the same IRS procedures as are used to request a turnover
of an income tax refund from the IRS.

The United States Trustee Program will not seek to compel a trustee to recover stimulus payments
that the trustee, in his or her discretion, decides not to recover in light of all relevant considerations.