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In Velde v. Thiel (In re Thiel), No. 15‑60071 (Bankr. D. Minn. Jan. 23, 2018), the bankruptcy court revoked a chapter 7 debtor’s discharge, pursuant to 11 U.S.C. § 727(d)(2), for knowingly and fraudulently failing to surrender to the chapter 7 trustee tax refunds for post-petition wages. Initially, the trustee filed a motion under § 542(a) for turnover of the tax refunds, but the debtor had spent all of the refunds. The court denied the turnover motion, as a condition to turnover is the possession, custody, or control of the property being sought.

The trustee then commenced an adversary proceeding seeking revocation of the debtor’s discharge pursuant to § 727(d)(2). The court noted that § 727(d)(2) requires that the debtor “knowingly and fraudulently” failed to report or deliver property of the estate. To determine whether the knowing and fraudulent elements were met, the Court examined the debtor’s pattern of conduct and inconsistent statements (such as regarding when he received the refunds and how he spent them). The court concluded that, taking into account those factors and the surrounding circumstances, the knowing and fraudulent elements were satisfied. Accordingly, the court revoked the discharge.