§ 159.1 Taxes

§ 159.1 Taxes
Cite as: Keith M. Lundin, Lundin On Chapter 13, § 159.1, at ¶ ____, LundinOnChapter13.com (last visited __________).

[1]

Prior to BAPCPA, all tax debts were dischargeable at the completion of payments under a Chapter 13 plan. Many tax debts were and still are priority claims entitled to full payment as a condition for confirmation under § 1322(a)(2).1 Full payment through the Chapter 13 plan has always meant payment without interest over the life of the plan.2 Also, prior to BAPCPA, if the holder of a priority tax claim failed to timely file a proof of claim, the tax debt would be dischargeable at the completion of payments without regard to whether any portion of the debt was paid through the plan.

[2]

BAPCPA changed the treatment of tax debts by selectively making taxes nondischargeable at the completion of payments under a Chapter 13 plan. There are three classes of tax debts that are now nondischargeable:

Section 507(a)(8)(C). A tax required to be collected or withheld “for which the debtor is liable in whatever capacity.”3 This would include trust fund taxes such as state and federal withholding taxes and most sales taxes.

Section 523(a)(1)(B). A tax or custom duty with respect to which a return “or equivalent report or notice” was not filed or given or, if filed or given, was filed or given after the date on which the return, report or notice was last due and within two years before the filing of the Chapter 13 petition.4

Section 523(a)(1)(C). A tax or custom duty with respect to which the debtor “made a fraudulent return or willfully attempted in any manner to evade or defeat such tax.”5

[3]

Although not specifically cross-referenced by § 1328, BAPCPA added a hanging paragraph at the end of § 523(a) that may be relevant to the second and third new exceptions to discharge listed above:

For purposes of this subsection, the term “return” means a return that satisfies the requirements of applicable nonbankruptcy law (including applicable filing requirements). Such term includes a return prepared pursuant to section 6020(a) of the Internal Revenue Code of 1986, or similar State or local law, or a written stipulation to a judgment or a final order entered by a nonbankruptcy tribunal, but does not include a return made pursuant to section 6020(b) of the Internal Revenue Code of 1986, or a similar State or local law.6

[4]

The hanging paragraph at the end of § 523(a) applies to “this subsection,” which would be § 523(a). Section 523(a) contains two of the cross-referenced new exceptions to discharge for taxes in Chapter 13 cases—§ 523(a)(1)(B) and (1)(C). For purposes of those subsections, “return” includes returns prepared by the IRS under IRC § 6020(a)—returns signed or acknowledged by the taxpayer—but does not include a return by the Service under IRC § 6020(b), which is prepared without the cooperation or approval of the taxpayer. It is perhaps only interesting that, for purposes of the new prepetition tax-return-filing requirements in § 1308, “return” is defined to include both § 6020(a) and § 6020(b) returns.7

[5]

BAPCPA did not make all tax debts nondischargeable at the completion of payments in a Chapter 13 plan. Significant tax debts that are still dischargeable at the completion of payments under a Chapter 13 plan are: taxes due within three years before the petition or within the 240-day assessment rule if returns were timely filed as described in § 507(a)(8)(A); pecuniary loss penalties related to taxes as specified in § 507(a)(8)(G); and excise taxes described in § 507(a)(8)(E). The 100 percent penalty assessed by the IRS against responsible persons when a corporation fails to pay withholding taxes under IRC § 6672 typically falls within pecuniary loss penalties under § 507(a)(8)(G) and would be dischargeable in a Chapter 13 case at the completion of payments under the plan.

[6]

But keep in mind that all of the taxes listed above—whether dischargeable or nondischargeable at the completion of payments in a Chapter 13 case—are priority claims that must be paid in full to confirm a Chapter 13 plan. The nondischargeable taxes listed above will now continue to accrue nondischargeable postpetition interest during a Chapter 13 case. The taxes that remain dischargeable can be paid in full through the plan without payment or accrual of postpetition interest.

[7]

The tax debts that are now nondischargeable in all Chapter 13 cases are not included in § 523(c), and thus there is no statutory requirement that the dischargeability of these taxes be determined by the bankruptcy court during the Chapter 13 case. The IRS is not compelled by the Bankruptcy Code or Rules to file a complaint to determine the dischargeability of taxes during the Chapter 13 case. But because the Chapter 13 plan must provide for full payment of all priority claims, including taxes,8 the priority status of a tax debt typically is either agreed upon or litigated at or before confirmation in a Chapter 13 case. Because the priority of taxes is coextensive with the nondischargeability of taxes within the classes described, the priority determination is conclusive of the nondischargeability determination with respect to priority tax debts that are also now nondischargeable in a Chapter 13 case. Put another way, the Chapter 13 debtor who wishes to contest the nondischargeability of a tax must litigate the priority of that tax because a finding of priority may be preclusive of nondischargeability.

[8]

The principal impact of adding nondischargeability to the priority status of some tax debts will be at confirmation when savvy Chapter 13 debtors separately classify the nondischargeable tax claims for full payment with postpetition interest. Priority status has long been recognized as a basis for the separate classification of unsecured debt when a Chapter 13 debtor is financially unable to pay all unsecured claims in full. Because priority debts have to be paid in full to accomplish confirmation under § 1322(a)(2), most courts allow the separate classification of priority debts for payment in full, notwithstanding that other unsecured creditors are not being paid in full through the plan.9 Nondischargeability by itself has rarely been accepted as a basis for classification and more favorable treatment of unsecured debt in Chapter 13 cases.10 The combination of priority and nondischargeable status would support the fairness of discrimination to pay a tax debt in full but adds little of substance to the argument that a nondischargeable tax debt can be separately classified for payment of postpetition interest. The unfair discrimination standard in § 1322(b)(1) stands as a barrier to the payment of postpetition interest to the holder of a priority tax claim that became nondischargeable after BAPCPA.

[9]

Detailed elsewhere,11 BAPCPA added a new subparagraph (10) to § 1322(b) that permits the Chapter 13 plan to provide for the payment of postpetition interest on unsecured claims that are nondischargeable “to the extent that the debtor has disposable income available to pay such interest after making provision for full payment of all allowed claims.”12 The full-payment predicate for this new permissive plan provision makes it unlikely that Chapter 13 debtors flock to its use. It also suggests that in the absence of full payment of other unsecured claims, Chapter 13 debtors are not likely to survive a fair discrimination challenge when the plan separately classifies a nondischargeable tax debt for payment in full with postpetition interest.

[10]

What this means for many Chapter 13 debtors is that at the completion of payments under the plan, there will be a surviving debt for nondischargeable postpetition interest on the tax claims that are now nondischargeable under § 1328(a). The debtor will be able to pay those priority tax debts in full through the plan even when other unsecured debts are not being paid in full, but it is unlikely that the debtor will be allowed to pay postpetition interest on a nondischargeable tax claim when the plan does not pay all unsecured debt in full. Postpetition interest will accrue and be nondischargeable at the completion of payments under the plan.

1 See §§ 99.1 [ What Claims Are Priority Claims? ] § 73.2 What Claims Are Priority Claims? and 292.1 [ Taxes ] § 136.2 Taxes before BAPCPA.

[ Return to Text ]

2 See §§ 100.1 [ Deferred Payments Are Permitted ] § 73.4 Deferred Payments Are Permitted and 100.2 [ Interest Not Required, with Exceptions ] § 73.5 Interest Not Required, with Exceptions.

[ Return to Text ]

3 11 U.S.C. § 1328(a)(2) (incorporating 11 U.S.C. § 507(a)(8)(C)).

[ Return to Text ]

4 11 U.S.C. § 1328(a)(2) (incorporating 11 U.S.C. § 523(a)(1)(B)).

[ Return to Text ]

5 11 U.S.C. § 1328(a)(2) (incorporating 11 U.S.C. § 523(a)(1)(C)).

[ Return to Text ]

6 11 U.S.C. § 523(a).

[ Return to Text ]

7 See 11 U.S.C. § 1308(c), 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.

[ Return to Text ]

8 See 11 U.S.C. § 1322(a)(2), discussed in § 98.1 [ Plan Must Provide Full Payment ] § 73.1 Plan Must Provide Full Payment.

[ Return to Text ]

9 See § 151.1 [ Priority Claims ] § 87.4 Priority Claims.

[ Return to Text ]

10 See discussion beginning at § 88.1 In General.

[ Return to Text ]

11 See § 459.1 [ Postpetition Interest on Nondischargeable Claims: § 1322(b)(10) ] § 88.3 Postpetition Interest on Nondischargeable Claims after BAPCPA: § 1322(b)(10).

[ Return to Text ]

12 11 U.S.C. § 1322(b)(10), discussed in § 459.1 [ Postpetition Interest on Nondischargeable Claims: § 1322(b)(10) ] § 88.3 Postpetition Interest on Nondischargeable Claims after BAPCPA: § 1322(b)(10).

[ Return to Text ]

Nomellini v. IRS (In re Nomellini), 747 F. App’x 573, 573–74 (9th Cir. Dec. 28, 2018) (unpublished) (Callahan, Smith, Murguia) (Confirmed plan that paid IRS secured claim in full did not avoid or limit underlying lien; lien survived discharge and IRS can foreclose to collect amounts not paid through confirmed plan including amounts that could have but weren’t included in IRS’s claim during the Chapter 13 case. “[T]he IRS debt was secured by a perfected pre-petition lien . . . . Nomellini’s confirmed Chapter 13 bankruptcy plan recognized the IRS’s secured claim. The plan did not avoid the tax lien. In fact, it made no reference to the IRS’s tax lien nor did it make any indication of Nomellini’s intent to avoid that lien. . . . Because the plan did not explicitly avoid the IRS’s tax lien nor otherwise attempt to modify the IRS’s in rem rights, that lien passed through bankruptcy unaffected and remained in full force and effect at the time Nomellini sought to sell his home.”).

Giacchi v. IRS (In re Giacchi), 856 F.3d 244, 249 (3d Cir. May 5, 2017) (Fisher, Greenaway, Roth) (Applying Beard v. Commissioner, 793 F.2d 139 (6th Cir. June 24, 1986) (Keith, Nelson, Edwards), and not reaching “one-day-late rule” adopted by some circuits, “Giacchi’s belated filings after assessment are not an honest and reasonable effort to comply with the tax law under the Beard and, as such, the filings do not constitute returns. . . . [T]he debts are not dischargeable in bankruptcy pursuant to 11 U.S.C. § 523(a)(1)(B).”), aft'g 553 B.R. 36, 39-40 (E.D. Pa. Sept. 30, 2015) (Leeson) (Citing McCoy v. Mississippi State Tax Commission (In re McCoy), 666 F.3d 924 (5th Cir. Jan. 4, 2012) (King, Jolly, Wiener), late-filed, post-assessment tax "returns" were not returns under § 523(a)(1) and the underlying tax is not dischargeable. "Giacchi's tax documents filed for 2000, 2001, and 2002 . . . were filed too late—after the tax assessments had been made. Accordingly, the post-assessment filed tax documents are not 'returns,' and the tax liabilities for 2000, 2001, and 2002 are not discharged. . . . A return filed after the Internal Revenue Service has done its own investigation and assessed tax does not represent an honest and reasonable attempt to satisfy the requirements of the tax law.").

In re Calabrese, 689 F.3d 312 (3d Cir. July 20, 2012) (McKee, Hardiman, Jones) (Retail sales taxes collected by a Chapter 13 debtor as proprietor of a restaurant are nondischargeable trust fund taxes under § 523(a)(1)(A) and § 507(a)(8)(C).), aff'g 464 B.R. 671 (D.N.J. Sept. 13, 2011) (Hillman) (State sales taxes are nondischargeable trust fund taxes under § 1328(a)(2) and § 507(a)(8)(C), rather than excise taxes.).

United States v. Monahan (In re Monahan), 497 B.R. 642, 647-49 (B.A.P. 1st Cir. Sept. 19, 2013) (Haines, Deasy, Godoy) (Payment in full of priority trust fund taxes under §§ 507(a)(8) and 1322(a)(1) did not discharge postpetition interest; IRS did not violate discharge injunction or transgress United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 130 S. Ct. 1367, 176 L. Ed. 2d 158 (Mar. 23, 2010), by seeking to collect postpetition interest after discharge when plan did not purport to pay or discharge postpetition interest. "[B]ased on § 502, courts have held that 'creditors are not entitled to include unmatured (or "post-petition") interest as part of their claims in the bankruptcy proceedings.' . . . § 1322(b)(10) provides the lone exception in which a plan may provide for the payment of interest accruing after the petition date on unsecured claims. . . . [T]he trust fund recovery penalties assessed under 26 U.S.C. § 6672 in this case come within the scope of § 507(a)(8)(C) and are therefore excepted from discharge. In the typical chapter 13 case with priority tax claims, a debtor has priority tax claims under § 507(a)(8) for unpaid income taxes due for recent tax years. See 11 U.S.C. § 507(a)(8)(A). To be confirmable, the chapter 13 plan would have to pay those claims in full over the life of the plan. 11 U.S.C. § 1322(a)(2). . . . [T]he chapter 13 plan would not—and generally could not—pay post-petition interest to the extent it accrued on those claims. However, upon the completion of all payments under the plan and the issuance of a discharge, the entire priority tax claim is discharged, because such debt was 'provided for by the plan.' See 11 U.S.C. § 1328(a). Thus, successful completion of a chapter 13 plan allows for the discharge of priority tax debts that are generally nondischargeable outside of chapter 13 under § 523(a)(1)(A) . . . . When the priority tax claim arises under § 507(a)(8)(C), the result is different because such tax claims are an exception to the general rule under § 1328. The debtor must still pay such claim in full without post-petition interest . . . if the chapter 13 plan is to be confirmed. However, because the claim is specifically excepted from discharge under § 1328(a)(2), the debtor remains liable for any unpaid portion of the claim, including any interest that accrues on the claim post-petition.").

IRS v. Davis, No. 15-7601 (MAS), 2018 WL 1440323 (D.N.J. Mar. 22, 2018) (unpublished) (Shipp) (Under fourth prong of Beard v. Commissioner of Internal Revenue, 793 F.2d 139 (6th Cir. June 24, 1986) (Keith, Nelson, Edwards), as applied by Third Circuit in Giacchi v. United States (In re Giacchi), 856 F.3d 244 (3d Cir. May 5, 2017) (Roth), that Chapter 13 debtor filed Forms 1040 after IRS assessed taxes and filed substitute returns for years in which debtor did not file timely returns cannot be an honest and good-faith effort; taxes for 2005 and 2006 were not discharged in prior Chapter 7 case and are not dischargeable in current Chapter 13 case.).

IRS v. Davis, No. 15-7601 (MAS), 2016 WL 3567039 (D.N.J. June 29, 2016) (Shipp) (District court grants motion for direct appeal to United States Court of Appeals for the Third Circuit of question whether Form 1040 filed late and after the IRS assessed taxes is a “return” for purposes of § 523(a)(1)(B)(i).).

United States v. Walton, No. F:07CV01988 ERW, 2012 WL 3704986 (E.D. Mo. Aug. 27, 2012) (unpublished) (Webber) (In case converted from Chapter 13 to Chapter 7, tax liability was not discharged.).

In re Nedelka, 595 B.R. 449, 452–53 (Bankr. D. Del. Dec. 20, 2018) (Shannon) (Taxes for 2004, 2005 and 2006 were nondischargeable under § 523(a)(1)(B)(i) and under § 523(a)(1)(B)(ii) when returns were filed in 2010 and the Chapter 13 petition was filed in 2010. Confirmed plan paid claims filed by the IRS but those claims did not include postpetition interest and some of the taxes for 2004. IRS did not violate discharge injunction by collection action after completion of the Chapter 13 plan. Citing Beard v. Commissioner, 793 F.2d 139 (6th Cir. June 24, 1986) (Keith, Nelson, Edwards), “[t]he fourth requirement, that a purported return must ‘represent an honest and reasonable attempt to satisfy the requirements of the tax law,’ is not met when a tax return is filed late and after an IRS assessment, as were the Nedelkas’ returns. . . . Given that, a return was not ‘given or filed’ for the Tax Debts, and, therefore, they are not dischargeable under §§ 1328(a) and § 523(a)(1)(B)(i). . . . [T]he plain language of § 523(a)(1)(B)(ii) is also clearly relevant . . . . Because the Nedelkas filed their petition in 2010, the returns were filed ‘after two years before’ the date for which they filed their Chapter 13 petition. . . . [W]hen the Discharge Order was issued, the Tax Debts were not dischargeable based on the plain language of §§ 1328(a) and 523(a)(1)(B)(ii); nor were they dischargeable under §§ 1328(a) and 523(a)(1)(B)(i) as interpreted in this Circuit[.]”).

Reuland v. IRS (In re Reuland), 591 B.R. 342, 349–52 (Bankr. N.D. Ill. Oct. 26, 2018) (Baer) (Distinguishing United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 130 S. Ct. 1367, 176 L. Ed. 2d 158 (Mar. 23, 2010), plan that treated nonpriority, nondischargeable taxes as general unsecured debt did not discharge tax claims because plan did not contain specific language that tax debt would be discharged with less than full payment. IRS was bound by its treatment as a general unsecured creditor but its failure to object to confirmation did not discharge its debt. Tax debt is nondischargeable under § 523(a)(1)(B)(ii) but not entitled to priority because returns were filed on eve of Chapter 13 petition for tax years more than three years prior to petition. “In stark contrast to the debtors’ plans in Espinosa . . . , the Reulands’ plan is silent as to the dischargeability of the debt at issue. . . . [T]he priority and discharge provisions aim to balance the interests of the public in collecting taxes, general creditors from losing out to excessive tax debt, and debtors in achieving a fresh start. . . . [T]hose interests are balanced by the full payment of priority tax debt; the partial payment of the tax debt for late-filed returns, with the unpaid portion being excepted from discharge; and the partial payment of the other general unsecured debt, with the unpaid portion being discharged.”).

In re Witcher, No. 13-00614, 2018 WL 4557610 (Bankr. D.D.C. Sept. 20, 2018) (Teel) (District of Columbia did not violate discharge injunction when it sought to collect taxes for a tax year that should have been included in the claim it filed in the completed Chapter 13 case. Taxes for prepetition year at issue were not dischargeable in Chapter 13 and could be collected without violating discharge injunction notwithstanding that taxing authority should have included the taxes in its proof of claim.).

Betancourt v. United States (In re Betancourt), 582 B.R. 480, 486 (Bankr. W.D. Mo. Feb. 1, 2018) (Dow) ($4,000 balance of recapture of first-time home buyer tax credit is a dischargeable unsecured claim, not a tax. Debtor was a first-time home buyer before bankruptcy and received a one-time tax credit of $7,500 under 26 U.S.C. § 36(a) and (h). $4,000 was still due under the recapture provisions of the credit when the Chapter 13 case was filed. “The $4,000 in recapture payments owed to the IRS is not a priority tax debt under § 507 nor does it fit any of the enumerated exceptions to discharge under § 523.”).

In re Ladona, No. 11-10400-BAH, 2017 WL 2437233, at *2–*3 (Bankr. D.N.H. June 2, 2017) (Harwood) (Tax claim entitled to priority under § 507(a)(8) and to nondischargeability under § 523(a)(1)(A) and (B) though paid in full through Chapter 13 plan continued to accrue interest that could not be paid because of § 1322(b)(10). Accruing interest was nondischargeable and could be collected after completion of plan without violating discharge injunction. “Debtor’s 2009 tax liability was entitled to priority treatment under 11 U.S.C. § 507(a)(8)(A)(i). . . . [T]here is no dispute that the Debtor’s 2009 tax return was filed late, and therefore, is not a ‘return’ under 11 U.S.C. § 523(a)(1)(B). As a result, it naturally follows that the 2009 tax liabilities arising from the late return are excepted from discharge under 11 U.S.C. §§ 523(a)(1)(B) and 1328(a)(2). . . . A debtor’s personal liability for post-petition interest on a nondischargeable tax claim survives bankruptcy to the extent that it is not provided for by the plan. . . . Pursuant to 11 U.S.C. § 1322(b)(10) . . . the Plan did not provide for payment in full of all allowed claims, and thus could not, as a matter of law, provide for the payment of post-petition interest on the IRS’s claim. . . . [P]ost-petition interest, which was not provided for by the Plan, continued to accrue on the claim during the pendency of the Debtor’s case.”).

In re Thaxton, No. 2:09-bk-20649, 2017 WL 2371121, at *2 (Bankr. S.D. W. Va. May 30, 2017) (Volk) (Chapter 13 debtor’s personal liability for responsible officer § 941 taxes is nondischargeable under § 507(a)(8)(C); postpetition “unmatured” interest that accrues during the Chapter 13 case cannot be paid under § 502(b)(2) and remains a personal liability of the debtor after completion of payments and discharge. “A Chapter 13 plan must thus provide for payment in full of an allowed priority tax claim, without post-petition interest. . . . [P]ostpetition interest accrues outside the Chapter 13 plan and the debtor remains personally liable therefor post discharge.”).

Aikman v. IRS (In re Aikman), 554 B.R. 95, 98-99 (Bankr. W.D. Pa. July 22, 2016) (Böhm) (In a Chapter 13 case filed on January 22, 2010, unpaid taxes, interest and penalties for tax years 2006 and 2007 are not dischargeable under § 523(a)(7)(B) because returns were due on April 15, 2007, and after—within three years of the petition. “Debtor’s 2006 and 2007 federal tax returns were both due within three (3) years of the Petition Date. . . . As such, the taxes comprising the IRS’s secured claim and unsecured priority claim are the kinds of taxes described in section 507(a)(8) and, therefore, are not dischargeable pursuant to section 523(a)(1)(A). . . . [Section] 523(a)(7) determines the dischargeability of the penalty portion . . . . [T]he underlying taxes are not dischargeable pursuant to section 523(a)(1)(A). Thus, the penalties comprising the IRS’s general unsecured claim do not come within the ambit of the exception to nondischargeability found in section 523(a)(7)(A). . . . [T]he date the 2006 returns were due was April 15, 2007—within the three years before the Petition Date. Thus, the IRS’s general unsecured claim does not qualify as a dischargeable tax penalty pursuant to section 523(a)(7)(B).”).

In re Davis, No. 14-26507 (CMG), 2015 WL 5734332, at *1-*5 (Sept. 29, 2015) (unpublished) (Gravelle) (Untimely filed tax "return" can be a return for § 523(a)(1)(B) purposes even when filed after a substitute return has been prepared by the IRS under 26 U.S.C. § 6020(b). "In this case, the IRS processed and filed a[ ] [Substitute For Return] on behalf of Debtor, pursuant to [26 U.S.C. § 6020(b)] . . . . Debtor did not sign either SFR and did not respond to any notices or inquiries . . . . Debtor submitted Form 1040s for the 2005 and 2006 tax years, which reduced the . . . SFR estimated tax . . . . Congress . . . sought to define the term 'return' by the addition of a 'hanging paragraph' at the end of 11 U.S.C. § 523(a) . . . . Since the inclusion of the hanging paragraph, each of the three circuit courts that have ruled on the issue held that a late return does not satisfy the hanging paragraph's definition of a return. . . . [N]o issue has been raised with regard to Debtor's honesty and reasonableness. We agree with those decisions that hold that the timing of the filing is not a factor in determining whether the document meets the definition of a 'return.' . . . [A] late filed return can still constitute a 'return' for the purposes of discharge under [§] 523(a).").

Linn v. United States (In re Linn), No. 14-5222, 2015 WL 3484538 (Bankr. N.D. Ga. Apr. 30, 2015) (Murphy) (IRS did not violate the discharge injunction by seeking to collect tax debts for 2003, 2004 and 2005 because those tax debts were nondischargeable under § 523(a)(1)(B)(ii).).

In re Regier, No. 09-60828, 2015 WL 367103, at *2 (Bankr. W.D. Mo. Jan. 27, 2015) (Federman) (In Chapter 13 case filed in 2009, unpaid income taxes for 2000 through 2005 were not entitled to priority but were nondischargeable because debtor tardily filed returns in 2008—within two years of bankruptcy for purposes of § 523(a)(1)(B)(ii). Chapter 13 case was filed in April of 2009. Debtor tardily filed 2000 through 2005 federal income tax returns in 2008, within two years before the Chapter 13 petition. "[R]eading §§ 1328(a)(2), 523(a)(1)(B)(ii), and 507(a)(8)(A)(i) together creates a class of income tax debts which are not entitled to priority because the returns are last due, without extensions, more than three years prepetition, but are nondischargeable because the returns were tardily filed within two years prepetition. The Debtor's tax obligations for the years 2000 through 2005 fall within that category.").

Ollie-Barnes v. IRS (In re Ollie-Barnes), No. 14-09004, 2014 WL 5794866, at *5 (Bankr. M.D.N.C. Nov. 6, 2014) (Kahn) (Equitable tolling applies to two-year look-back period in § 523(a)(1)(B)(ii). "In Young v. United States[, 535 U.S. 43, 49, 122 S. Ct. 1036, 15 L. Ed. 2d 79 (Mar. 4, 2002)], the United States Supreme Court held that the three year lookback period of 11 U.S.C. §§ 523(a)(1)(A) and 507(a)(8)(A)(i) was tolled during the pendency of a prior bankruptcy case. The Court used its equitable power under 11 U.S.C. 105(a) to find that the three year period of Sections 523(a)(1)(A) and 507(a)(8)(A)(i) were tolled for the time of a debtor['s] previous bankruptcy case. . . . [T]he two year look-back period in § 523(a)([1])(B)(ii) is similarly subject to equitable tolling under either Sections 105(a) or 108(c) because it is an indistinguishable limitations period from the period in Sections 523(a)(1)(A) and 507(a)(8)(A)(i). . . . [E]xtending Young's rationale to 11 U.S.C. § 523(a)([1])(B)(ii) is proper, even though there is no tolling language in either Section 523(a)(8)(A)(i) or Section 523(a)([1])(B)(ii).").

In re Carlin, No. 11-11784 (ALG), 2014 WL 5023653, at *2-*3 (Bankr. S.D.N.Y. Oct. 7, 2014) (Gropper) (In Chapter 13 case filed in 2011, income taxes for 2008 are nondischargeable under BAPCPA amendments to § 1328(a)(2) when 2008 return was filed late and within two years of current petition. IRS permitted to withdraw late-filed proof of claim under Bankruptcy Rule 3006. "Carlin filed his 2008 tax return after its due date and after April 18, 2009—two-years prior to the petition date. This is the type of tax rendered non-dischargeable in a chapter 13 case by the 2005 amendment to § 1328. . . . [T]here is no authority that a non-dischargeable claim has to be filed in a chapter 13 case or that it will lose its status as non-dischargeable because a chapter 13 debtor refers to the liability in the petition. . . . The question remains whether the IRS should be allowed to withdraw its untimely proof of claim. The governing rule is Bankruptcy Rule 3006, . . . an objection to a claim has been filed . . . . [B]ut Carlin has identified no reason why the IRS should not be able to withdraw its non-dischargeable claim. . . . [T]he Court has no authority to allow a late proof of claim in a chapter 13 case. . . . The filing of a late proof of claim for a debt that is non-dischargeable is not a catch-22 that causes the debt to be dischargeable. Thus, the IRS may withdraw its proof of claim.").

In re Kemendo, 516 B.R. 434 (Bankr. S.D. Tex. Sept. 17, 2014) (Brown) (Applying McCoy v. Mississippi State Tax Commission (In re McCoy), 666 F.3d 924 (5th Cir. Jan. 4, 2012) (King, Jolly, Wiener), substitute for return prepared by taxing authority with cooperation of taxpayer is a return for purposes of § 523(a)(a). Taxes, penalties and interest for tax years 1995 and 1996 for which IRS prepared substitutes for returns before two years before bankruptcy filing were discharged under § 1328(a).), vacated and remanded, No. H-15-573, 2015 WL 5009219 (S.D. Tex. Aug. 21, 2015) (Miller).).

Wisconsin v. Davis (In re Davis), 507 B.R. 280 (Bankr. E.D. Wis. Mar. 10, 2014) (Kelley) (State unemployment contributions were a tax for purposes of § 523(a)(1)(A); however, debtor did not have control over corporate governance sufficient to make her liable for unpaid contributions.).

In re Weiss, No. 06-21677, 2013 WL 6726502, at *3-*5 (Bankr. D. Kan. Dec. 19, 2013) (Berger) (Trust fund taxes specified in § 507(a)(8)(C) are dischargeable without payment in a Chapter 13 case when IRS does not have an allowable priority unsecured claim because it did not timely file a proof of claim; tax liability arising from unfiled or late-filed returns is nondischargeable under § 523(a)(1)(B) and § 1328(a)(2) without regard to whether the IRS filed an allowable proof of claim. Confirmed plan provided that allowed priority claims of the IRS would be paid in full without postpetition interest. The IRS did not file a timely proof of claim and withdrew two late-filed proofs of claim. "[BAPCPA] narrowed the Chapter 13 discharge by amending § 1328(a)(2) to except from discharge tax debts of the kind specified in § 507(a)(8)(C) and §[ ] 523(a)(1)(B). . . . Before the 2005 Amendments, a Chapter 13 full payment discharge under § 1328(a) discharged Trust Fund Taxes if the plan provided for payment of priority tax claims in full. This was the result even if the taxing authority did not actually receive payments because it did not file a proof of claim or filed it late. . . . [O]ne might argue that Congress intended to except from discharge Trust Fund Taxes in Chapter 13 cases whether a claim is allowed or is not allowed, but Congress did not so provide in § 1328(a)(2). Absent allowance of the Trust Fund Tax as a priority unsecured claim . . . there is not a defined debt to except from discharge. . . . Absent an allowed priority unsecured claim, the alleged tax debt is not of a kind under § 507(a)(8)(C). . . . [Section] 523(a)(1)(A) excepts from discharge a tax debt 'whether or not a claim for such tax was filed or allowed.' However, this language does not apply to Trust Fund Taxes under a § 1328(a) full payment discharge. If Congress intended that § 507(a)(8)(C) Trust Fund Taxes were not dischargeable regardless of whether an unsecured claim were filed and allowed, it did not so provide in the 2005 Amendments. . . . [U]nfiled or late-filed returns are excepted from discharge under § 1328(a) whether a claim has been or has not been allowed; however, the same is not true with regard to the Trust Fund Tax Exception because this exception to discharge requires the allowance of a priority unsecured claim.").

Mallo v. United States (In re Mallo), No. 11-1624 MER, 2013 WL 49774 (Bankr. D. Colo. Jan. 3, 2013) (Romero) (Citing Wogoman v. IRS (In re Wogoman), 475 B.R. 239 (B.A.P. 10th Cir. July 3, 2012) (Cornish, Rasure, Somers), IRS's substitute for returns, prepared under 26 U.S.C. § 6020b, did not constitute "returns" for purposes of § 523(a)(1)(B), since not signed by taxpayer; original returns were filed by debtors subsequent to IRS notices of deficiency and assessment and could not save taxes from nondischargeability.).

Kolve v. IRS (In re Kolve), 459 B.R. 376, 384 (Bankr. W.D. Wis. Sept. 22, 2011) (Utschig) (Citing California Franchise Tax Board v. Kendall (In re Jones), 657 F.3d 921 (9th Cir. Sept. 14, 2011) (Nelson, McKeown, Gould), income taxes for 2005 and 2006 were dischargeable in Chapter 7 case filed in November 2010, because three-year look-back in § 507(a)(8) was not tolled during prior Chapter 13 case in which estate property vested in debtors at confirmation. Prior Chapter 13 case did not preclude IRS from collecting 2005 and 2006 income taxes for purposes of tolling look-back. Confirmation in prior Chapter 13 had vested all property of estate in debtors. Under In re Jones, revesting permitted IRS to attempt collection from debtors. "This revesting meant that the automatic stay—which had previously acted to prevent post-petition creditors from pursuing property of the estate—was no longer 'in effect' as to those assets. The stay never prohibited the IRS from pursuing a collection action against the debtors, and at the time these tax claims came due, the 'stay of proceedings' was in effect (at most) as to only a portion of the debtors' post-confirmation assets.").

In re Hurdle, No. 10-12381-DWH, 2011 WL 2413324 (Bankr. N.D. Miss. June 10, 2011) (Houston) (Income tax claim filed by Mississippi Department of Revenue was clearly nondischargeable when debtor had not appealed tax assessment and did not file returns for several years.).

In re Steen, No. 08-35047-tmb13, 2009 WL 982595 (Bankr. D. Or. Apr. 13, 2009) (unpublished) (Brown) (Section 507(a)(8) look-back period for dischargeability of taxes was suspended during pendency of prior case.).

Faulk v. Commissioner of Internal Revenue, No. 23440-16S L, 2017 WL 6501922 (T.C. Dec. 18, 2017) (Guy) (Income taxes for 2006 are not discharged under § 523(a)(1) in a Chapter 13 case filed in 2011 when the 2006 tax return was filed in 2011.).