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In re- 450 S. WESTERN AVE., LLC,

Summarizing by Bradley Pearce

Jackson v. U.S. (In re Jackson)

Jackson v. U.S. (In re Jackson), Case No. EC-15-1072-DJuF (9th Cir. BAP Dec. 4, 2015) (published)]
Affirmed. The Ninth Circuit BAP held an amended proof of claim filed by the IRS was not untimely under Sections 502(b)(9) or 1308 of the Bankruptcy Code, or Bankruptcy Rule 3002(c)(1), because it related back to the original timely filed proof of claim, which provided fair notice of the basis for the ultimate claim made.
Procedural context:
Appeal from an Order of the Bankruptcy Court for the Eastern District of California overruling Chapter 13 Debtors' objection to an amended proof of claim filed by the IRS.
Debtors filed for Chapter 13 bankruptcy in February 2010, before filing their 2009 tax return. The IRS filed a timely proof of claim in April 2010, asserting unsecured priority tax claims for 2007 and 2008, as well as an estimated priority tax claim for 2009. The IRS's proof of claim noted that a portion of the 2007 and 2008 tax amounts were "pending examination" and contained a reservation of rights to assess the true tax liability for 2009 once the return was filed. The Debtors confirmed a Chapter 13 Plan in July 2010 that proposed to pay the IRS priority tax claims in full. At the time of confirmation, the Debtors had still not filed the 2009 return, having received an extension. Debtors timely filed the 2009 tax return in October 2010. Shortly after, Debtors filed a Second Amended Plan to lower plan payments based on a reduction in income. The Second Amended Plan, which did not alter treatment of the IRS claims, was confirmed in February 2011. In April 2011, approximately five months after Debtors filed the 2009 tax return, the IRS filed an amended proof of claim increasing the amounts for all three tax years. In January 2015, almost four years later, the Debtors objected to the IRS's amended claim, asserting Debtors timely filed the 2009 return under Section 1308 of the Bankruptcy Code and Section 502(b)(9) of the Code required the IRS to file its claim for tax year 2009 within 60 days after the 2009 return's filing. The Bankruptcy Court overruled Debtors' objection, agreeing with the IRS that Section 502(b)(9)'s 60-day deadline only applies to an original proof of claim and does not preclude the filing of an amended proof of claim. Debtors appealed to the Ninth Circuit BAP.
Dunn, Jury, and Faris.

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