Martin v. United States (In re Martin)
482 B.R. 635
Bankr.D. Colo.2012Background
- Debtor filed voluntary Chapter 7 on Oct 28, 2010; discharge entered Feb 18, 2011.
- At filing, Debtor owed 2000 and 2001 federal income taxes.
- IRS assessed the 2000/2001 liabilities after examination and deficiency notices on Nov 8, 2004.
- Debtor submitted Forms 1040 signed under penalty of perjury for 2000 and 2001 around May 5, 2005.
- IRS abated some liabilities in Sept 2005; post-abatement amounts equal the May 2005 returns.
- Debtor does not dispute the amount currently outstanding.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are post-assessment returns 'returns' under 523(a)(1)(B)(i)? | Martin argues post-assessment returns qualify. | United States contends post-assessment returns do not qualify. | Post-assessment 1040s can be returns; debt not discharged. |
| How should 'applicable filing requirements' be interpreted for 'returns'? | Applicable filing requirements include form, contents, and filing duties, not timeliness. | Filing after assessment fails requirements and cannot be a return. | Timeliness not controlling; form/contents and nonbankruptcy law govern. |
| What standard governs whether a document 'evinces an honest and genuine endeavor'? | Beard test applies (subjective intent matters). | Objective approach may apply in some circuits; timeliness irrelevant. | Use an objective, face-of-document test; Debtor's returns satisfied the standard. |
Key Cases Cited
- Beard v. Commissioner, 82 T.C. 766 (1984) (Beard test for when a document is a return)
- Germantown Trust Co. v. Commissioner, 309 U.S. 304 (1940) (data from which tax can be computed; good faith return)
- Zellerbach Paper Co. v. Helvering, 293 U.S. 172 (1934) (perfect accuracy not necessary for return validity)
- In re Hindenlang, 164 F.3d 1029 (6th Cir. 1999) (post-assessment returns often not dischargeable (Sixth Circuit))
- In re Moroney, 352 F.3d 902 (4th Cir. 2003) (post-assessment filings not satisfying return purpose)
- In re Payne, 431 F.3d 1055 (7th Cir. 2005) (timing and intent considerations in Beard lineage)
- Colsen v. United States, 446 F.3d 836 (8th Cir. 2006) (objective face-of-form approach to returns)