Linda McCoy v. Mississippi State Tax Cmsn
666 F.3d 924
| 5th Cir. | 2012Background
- McCoy filed for Chapter 7 bankruptcy on 9/25/2007 and received a discharge on 1/23/2008.
- Post-discharge, McCoy sued MSTC in bankruptcy court (12/3/2008) seeking discharge of pre-petition Mississippi tax debts for 1998 and 1999.
- MSTC moved to dismiss, arguing late Mississippi returns are not “returns” under 11 U.S.C. §523(a)(1)(B)(i) after BAPCPA.
- Bankruptcy court dismissed; district court affirmed; McCoy appealed, and the Fifth Circuit affirmed.
- McCoy argues for applying Hindenlang pre-BAPCPA test or a broader reading of §523(a)(*) to include late returns as returns; MSTC argues that late returns are not returns unless filed under the safe harbor (6020(a)).
- The court adopts MSTC’s plain-language reading of §523(a)(*) and holds late Mississippi returns are not returns for discharge purposes unless filed under a safe harbor.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether late-filed Mississippi returns qualify as dischargeable returns | McCoy argues Hindenlang governs; late returns can qualify | MSTC argues plain text of §523(a)(*) excludes late returns unless 6020(a) applies | Late-filed state returns are not returns unless under 6020(a) safe harbor |
| Whether §523(a)(*) should be read to apply the pre-BAPCPA Hindenlang test for state taxes | McCoy urges Hindenlang to apply to state taxes | MSTC argues plain-language definition controls; Hindenlang not required | Court adopts plain-language reading; Hindenlang not applied to state taxes |
| Whether the Mississippi filing deadline affects dischargeability of 1998–1999 taxes | Late filings could still be considered returns | Late filings fail applicable nonbankruptcy filing requirements | McCoy’s 1998–1999 returns not returns; debts not discharged |
Key Cases Cited
- In re Hindenlang, 164 F.3d 1029 (6th Cir. 1999) (defined the four-part return test before BAPCPA; not extended to state taxes here)
- In re Colsen, 446 F.3d 836 (8th Cir. 2006) (noting §523(a) does not apply to pre-BAPCPA state tax filing principles)
- In re Ciotti, 638 F.3d 276 (4th Cir. 2011) (addressed state form reporting related to dischargeability; limited guidance here)
- In re Payne, 431 F.3d 1055 (7th Cir. 2005) (early interpretation of §523(a)(*) pre-BAPCPA approach to returns)
- In re Hatton, 220 F.3d 1057 (9th Cir. 2000) (pre-BAPCPA view on late-filed federal returns for dischargeability)
- In re Moroney, 352 F.3d 902 (4th Cir. 2003) (pre-BAPCPA approach to late-filed returns for dischargeability)
- In re Greenway (Matter of Greenway), 71 F.3d 1177 (5th Cir. 1996) (narrow construction of §523(a) in favor of debtor)