502 B.R. 645
Bankr. N.D. Ga.2013Background
- Debtor filed Chapter 13 on March 30, 2012 and did not list the IRS as a creditor; the IRS received no notice of the case or the governmental-entity bar date (180 days).
- The Chapter 13 plan was confirmed; the IRS filed a proof of claim after the bar date asserting priority income tax and penalties.
- The Chapter 13 Trustee objected to the IRS claim as untimely and moved to disallow it entirely.
- Because the IRS lacked timely notice, it could not have filed or moved for an extension before the deadline; if disallowed, the tax debt would be non-dischargeable under 11 U.S.C. § 523(a)(3).
- The core legal question was whether a late-filed proof of claim in Chapter 13 must be disallowed even when the claimant did not receive sufficient notice of the case and bar date.
Issues
| Issue | Plaintiff's Argument (Trustee) | Defendant's Argument (IRS) | Held |
|---|---|---|---|
| Whether a late-filed proof of claim must be disallowed despite lack of notice | Rule 3002(c) and §502(b)(9) impose an absolute bar; courts cannot enlarge time except as Rule 3002(c) permits | Equitable considerations, due process, and lack of notice permit allowing a late claim so creditor may participate | Held for IRS: late-filed claim allowed where creditor did not receive sufficient notice |
Key Cases Cited
- Gardenhire v. Internal Revenue Service, 209 F.3d 1145 (9th Cir. 2000) (interprets Rule 3002(c) and §502(b)(9) strictly to bar untimely proofs of claim)
- Hairopoulos v. Internal Revenue Service, 118 F.3d 1240 (8th Cir. 1997) (lack of notice defeats fundamental fairness; equitable relief may permit late filing)
- Unroe v. United States, 937 F.2d 346 (7th Cir. 1991) (distinguishes claims bar dates from statutes of limitation and recognizes equitable power to allow late claims)
- United States v. Cardinal Mine Supply, Inc., 916 F.2d 1087 (6th Cir. 1990) (due process and equity require permitting tardy filing when creditor lacked notice)
- Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950) (defines "reasonable notice" under due process standards)