Now Updating
In re Paul Cumbess

Summarizing by Kathleen DiSanto

In re S.S. Body Armor Inc.

Summarizing by Thomas Horan

Hawkins, III v. The Franchise Tax Board of CA

Citation:
Hawkins, III v. The Franchise Tax Board of CA, BAP No. 11-16276 (9th Cir. Sept. 15, 2014)
Tag(s):
Ruling:
REVERSED, and REMANDED. The "mere showing of spending in excess of income is not sufficient" to establish willfulness under 523(a)(1)(C), and the proper standard is whether Plaintiff's actions were "taken with the specific intent to evade the tax."
Procedural context:
Plaintiff-Debtor appealed the district court's affirmance of the bankruptcy court's judgment that his tax debts were excepted from discharge pursuant to 523(a)(1)(C).
Facts:
The bankruptcy court based its judgment on the fact that Plaintiff's and his wife's living expenses were "truly exceptional" even after it became apparent that they were insolvent and that their expenses exceeded their earned income. The record does not contain any evidence that Plaintiff engaged in "financial transfers into nominee accounts or concealment of assets."
Judge(s):
Kleinfeld, Thomas, and Rawlinson (dissent).

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