Yes, but it’s worse than that.
If you are in a chapter 13, if you don’t turn over your refund (because you spent it on your family or rebuilt the transmission that just went out), the trustee can move to dismiss your case. Then you simply have to file a new one.
In a chapter 7, if the trustee has ordered turn over of the tax refund, you need to do it. If you don’t, then the trustee will move to revoke your discharge. This means that your entire chapter is thrown out and you can NEVER file a chapter 7 on those same debts again.
That being said, you can file a chapter 13 to discharge those same debts, so it’s not the end of the world, but it would be easier to turn over the refund and not go through the hassle.
This is not legal advice. If you need help, go to www.robertspaynelaw.com.