Pendergast v. Massachusetts Department of Revenue
510 B.R. 1
1st Cir. BAP2014Background
- Pendergast and Wood filed late Massachusetts income tax returns; several were post-assessment.
- Both debtors filed for bankruptcy (Pendergast: Chapter 7; Wood: Chapter 12 converted to 7).
- Debtors sought discharge of MDOR tax liabilities for years at issue under § 523(a)(*) despite tardy filing.
- MDOR contends late-filed returns cannot be ‘returns’ under § 523(a)(*) because of filing requirements.
- Gonzalez and Brown addressed similar post-assessment timing issues in Massachusetts; this panel now resolves the post-assessment question.
- Massachusetts law governs whether late-filed returns count as returns for discharge purposes, with § 6020(a) versus § 6020(b) analogies discussed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether late-filed post-assessment MA returns qualify as returns under § 523(a)(*) | Pendergast/Wood: late MA returns may still be returns under § 523(a)(*). | MDOR: § 523(a)(*) requires compliance with nonbankruptcy filing requirements; post-assessment late returns do not. | No; late-filed, post-assessment MA returns do not qualify as returns under § 523(a)(*). |
| Role of Massachusetts nonbankruptcy law in defining ‘return’ under § 523(a)(*) | Massachusetts law treats late-filed returns as returns unless post-assessment; González precedent supports discharge. | Massachusetts ‘applicable nonbankruptcy law’ requires timeliness per filing requirements; post-assessment returns are not returns. | Massachusetts law defines returns for § 523(a)(*); post-assessment late returns do not satisfy the definition. |
| Impact of Beard/Hindenlang framework post-BAPCPA versus Massachusetts approach | Beard/Hindenlang factors apply to determine if a document is a return. | BAPCPA defines ‘return’; the hanging paragraph supports treating some post-assessment returns as non-returns. | Beard/Hindenlang replaced by § 523(a)(*) definition; under MA scheme, late-filed post-assessment returns are not returns. |
Key Cases Cited
- In re Gonzalez, 506 B.R. 1 (Bankr.D. Mass. 2013) (late pre-assessment MA returns may discharge; no timeliness requirement under MA law)
- In re Brown, 489 B.R. 1 (Bankr.Mass. 2013) (mass. law governs dischargeability of late-filed returns; depends on timing with assessment)
- Pendergast v. Mass. Dep’t of Revenue (In re Pendergast), 494 B.R. 8 (Bankr. D. Mass. 2013) (panel decision addressing post-assessment returns under MA law)
- Beard v. Comm’r, 82 T.C. 766 (Tax Court 1984) (four-factor test for a document to qualify as a return (Beard/Hindenlang))
- In re Hindenlang, 164 F.3d 1029 (6th Cir. 1999) (Beard test refinement pre-BAPCPA)
- McCoy v. Miss. State Tax Comm’n, 666 F.3d 924 (5th Cir. 2012) (distinguishes § 6020(a) vs § 6020(b) for returns)