Cite as: Keith M. Lundin, Lundin On Chapter 13, § 133.5, at ¶ ____, LundinOnChapter13.com (last visited __________).
BAPCPA did not change the basic rules that nongovernmental proofs of claim must be filed within 90 days of the first date set for the meeting of creditors1 and the proof of claim of a governmental unit must be filed before 180 days after the petition to be considered timely in a Chapter 13 case.2 But BAPCPA added an exception to this timeliness rule that is applicable only in Chapter 13 cases and only to governmental units.
BAPCPA added a new § 1308 to the Bankruptcy Code that imposes on Chapter 13 debtors complicated new tax return filing duties.3 Some of these new duties extend into the postpetition time period—including the possibility that the Chapter 13 trustee will “hold open” the § 341 meeting for 120 days or more to permit the filing of required tax returns.4 Recognizing that the 180-day period within which a governmental unit can timely file a proof of claim under § 502(b)(9) is counted from the petition in a Chapter 13 case, BAPCPA amended § 502(b)(9) to add the following new exception for proofs of claim relating to tax returns filed after the petition under § 1308:
except that in a case under chapter 13, a claim of a governmental unit for a tax with respect to a return filed under section 1308 shall be timely if the claim is filed on or before the date that is 60 days after the date on which such return was filed as required.5
Interim Rule 3002(c)(1) implements this new exception to the 180-day timeliness definition as follows:
(1) A proof of claim filed by a governmental unit, other than for a claim resulting from a tax return filed under § 1308, is timely filed if it is filed not later than 180 days after the date of the order for relief. On motion of a governmental unit before the expiration of such period and for cause shown, the court may extend the time for filing of a claim by the governmental unit. A proof of claim filed by a governmental unit for a claim resulting from a tax return filed under § 1308 is timely filed if it is filed not later than 180 days after the date of the order for relief or 60 days after the date of the filing of the tax return, whichever is later.6
The “date on which such return was filed” in § 502(b)(9) and the “date of the filing of the tax return” in Interim Rule 3002(c)(1) probably refer to filing with the taxing authority, not filing with the bankruptcy court. When timeliness of a tax claim is at issue, this date will be known only to the taxing authority.
The filing of tax returns after the petition under § 1308 and the extended period for the timely filing of proofs of claim by a governmental unit will push later into the Chapter 13 case the time at which the nature and amount of all allowable claims can be determined. Tax claims are often unsecured claims entitled to priority and full payment through the Chapter 13 plan.7 As reformulated by BAPCPA, the disposable income test in § 1325(b) will determine the amount of money that will be distributed to unsecured creditors in most Chapter 13 cases. Until the allowable amounts of all unsecured claims—including unsecured priority claims—are known, Chapter 13 trustees will not commence distributions to unsecured creditors. Any delay in the filing of tax returns under § 1308 produces a longer time within which a governmental unit can timely file a proof of claim under the new exception in § 502(b)(9). The result of this expanded permissible period in which a governmental unit can file a timely proof of claim will be delays in distributions to unsecured creditors in some Chapter 13 cases.
BAPCPA also changed the rules with respect to when and how a taxing authority seeks payment of taxes that are administrative expenses in a Chapter 13 case. Section 503(b)(1)(B) includes in allowable administrative expenses “any tax . . . incurred by the estate whether secured or unsecured, including property taxes for which liability is in rem, in personam, or both.”8 Ordinarily, an entity is required by § 503(a) to “timely file a request for payment of an administrative expense.” But BAPCPA enacted this odd exception for allowance of taxes incurred by a bankruptcy estate:
(D) notwithstanding the requirements of [§ 503(a),] a govern-mental unit shall not be required to file a request for the payment of an expense described in subparagraph (B) or (C), as a condition of its being an allowed administrative expense.9
New § 503(b)(1)(D) says that a governmental unit is not required to file a request for payment of a tax incurred by a bankruptcy estate as a condition for allowance of that administrative expense. There are taxes incurred by the estate in a Chapter 13 case, including property taxes described in § 503(b)(1)(D). If a taxing authority does not have to file a request for payment of an administrative expense as a condition of allowance, how will the Chapter 13 trustee or the debtor know that there is such a tax or the amount of that tax?
Without the filing of a request—timely or otherwise—perhaps the taxing authority holds an allowed administrative expense, but it is not likely that there will be any distributions by the Chapter 13 trustee until a request for payment is filed. A tax incurred by the Chapter 13 estate is a priority claim that must be paid in full under § 1322(a)(2),10 but BAPCPA has convoluted the payment of that tax by relieving the taxing authority of responsibility to file a request for payment.
1 See Fed. R. Bankr. P. 3002(c), discussed in § 282.1 [ General Rules: No Enlargement or Exceptions, Except . . . ] § 133.1 General Rules: No Enlargement or Exceptions, Except . . ..
2 11 U.S.C. § 502(b)(9), discussed in § 276.1 [ Governmental Units ] § 132.3 Governmental Units.
3 See § 391.1 [ Tax Return Duties One Day before First Scheduled Meeting of Creditors ] § 42.6 Tax Return Duties One Day before First Scheduled Meeting of Creditors.
4 11 U.S.C. § 1308(b), discussed in §§ 391.1 [ Tax Return Duties One Day before First Scheduled Meeting of Creditors ] § 42.6 Tax Return Duties One Day before First Scheduled Meeting of Creditors and 398.1 [ Holding Open the Meeting of Creditors ] § 43.7 Holding Open the Meeting of Creditors.
5 11 U.S.C. § 502(b)(9).
6 Interim Bankr. R. 3002(c)(1).
8 11 U.S.C. § 503(b)(1)(B).
9 11 U.S.C. § 503(b)(1)(D).
10 See § 441.1 [ New and Changed Treatment of Priority Claims ] § 73.6 Treatment of Priority Claims Changed by BAPCPA.