3rd Circuit: Debtors Tax Returns Filed After IRS’ Assessment of Liability Were Not “Returns” for Purposes of Determining Dischargeability

3rd Circuit: Debtors Tax Returns Filed After IRS’ Assessment of Liability Were Not “Returns” for Purposes of Determining Dischargeability

In this appeal, we must determine whether Internal Revenue Service Forms 1040, filed after the IRS has made an assessment of the taxpayer’s liability, constitute “returns” for purposes of determining the dischargeability in bankruptcy of tax debts under 11 U.S.C. § 523(a)(1)(B). The Debtor did not file tax returns on time for the years 2000, 2001, or 2002. Instead, he filed the forms years after they were due and after the Internal Revenue Service had assessed a liability against him. In 2010 and 2012, the Debtor filed for bankruptcy, and in 2013 he sought to discharge his tax liability for the years 2000, 2001, and 2002. The District Court affirmed the Bankruptcy Court’s order denying the discharge.

The Debtor failed to file Forms 1040 for 2000, 2001, and 2002 in a timely manner. In 2004, the IRS investigated and assessed a tax liability against the Debtor for 2000 and 2001. Approximately one month after the IRS made those tax assessments, the Debtor filed Forms 1040 for 2000 and 2001. However, he did not file his overdue Form 1040 for 2002 at that time. The IRS assessed his 2002 tax liability in 2005, and the Debtor  submitted a Form 1040 for 2002 in 2006. Based on information in the forms he filed, the IRS abated a portion of the assessment it had made.

In 2010, the Debtor  filed a voluntary Chapter 7 bankruptcy petition and received a discharge of his Pennsylvania tax liability. In 2012, the Debtor filed a Chapter 13 bankruptcy petition and brought this adversary proceeding against the federal government to seek a judgment that his assessed federal income tax liabilities for the years 2000, 2001, and 2002 had been discharged in his Chapter 7 bankruptcy. The Bankruptcy Court concluded that the tax debt in question, owed by the Debtor  to the IRS, was non-dischargeable under 11 U.S.C. § 523(a)(1)(B) because Giacchi had failed to file tax returns for 2000, 2001, and 2002, and the Debtor ‘s belatedly filed documents were not “returns” within the meaning of § 523(a)(1)(B) and other applicable law. The District Court affirmed. The Debtor appealed.

Log In to READ MORE

Please note, in order to view NACBA Member Content, you must sign in and then visit NEWS. If you are not a NACBA member, you may Become a NACBA Member 

No Comments

Post a Comment