Mallo v. IRS (In re Mallo) No. 13-1464 and Martin v. IRS (In re Martin) No. 13-1488
- Summarized by Brandon Bickle , Gable & Gotwals, PC
- 8 years 2 months ago
- Mallo v. IRS (In re Mallo) No. 13-1464 and Martin v. IRS (In re Martin) No. 13-1488; U.S. Court of Appeals for the Tenth Circuit
- The District Court's decision was affirmed. The 10th Circuit agreed that the untimely Form 1040s, filed after the IRS had assessed each debtor's tax liability, were not tax "returns" for purposes of the exceptions to discharge in 11 U.S.C. s. 523(a)(1)(B)(i), and therefore held that each debtor's tax liability was excluded from the general discharge orders in their chapter 7 cases. Simply put, the 10th Circuit recognized that the last unnumbered paragraph of Section 523(a) defines a "return" as a document "that satisfies the requirements of applicable nonbankruptcy law (including applicable filing requirements)," and concluded that timeliness is an "applicable filing requirement." Thus, because the Form 1040s at issue were untimely, the Court held they were not "returns" for purposes of Section 523(a)(1)(B)(i), and the tax debts reflected thereby were not dischargeable.
- Procedural context:
- These consolidated appeals concern the same issue decided differently in separate chapter 7 cases by different judges on summary judgment, in the U.S. Bankruptcy Court for the District of Colorado; namely, whether tardily-filed Form 1040s, filed post-assessment, were tax "returns" for purposes of 11 U.S.C. s. 523(a)(1)(B)(i), and thus whether the tax debts reflected thereby were included in each debtor's chapter 7 discharge. The bankruptcy court in the Mallos' case answered the question in the negative, and the bankruptcy court in the Martin case answered the question in the affirmative. Both decisions were appealed to the U.S. District Court for the District of Colorado, which consolidated the appeals for briefing purposes and concluded that the Form 1040s were not "returns" for purposes of Section 523(a)(1)(B)(i). Both cases were appealed to the U.S. Court of Appeals for the 10th Circuit, which consolidated the appeals and rendered the decision on which this summary is based.
- The material underlying facts in these two chapter 7 bankruptcy cases, pending before different judges in the same bankruptcy court, are the same. The debtors, individuals, failed to file federal income tax returns for the years 2000 and 2001. As a result, notices of deficiency were issued and assessments were made for taxes, penalties, and interest by the IRS. Following these assessments, the debtors each filed tardy Form 1040s for 2000 and 2001, and later filed bankruptcy. The debtors all received general discharge orders in their bankruptcy cases, and subsequently commenced adversary proceedings against the IRS, each arguing that the 2000 and 2001 tax debt had been discharged. Cross motions for summary judgment were filed in both adversary proceedings on the issue of whether the tax debt was excepted from discharge under 11 U.S.C. s. 523(a)(1)(B).
- Briscoe, Chief Circuit Judge; Lucero, Circuit Judge; and McHugh, Circuit Judge. Opinion by Judge McHugh.
ABI Membership is required to access the full summary. Please Sign In using your ABI Member credentials. Not a Member yet? Join ABI now - it is absolutely worth it!