Perkins v. Massachusetts Department of Revenue
507 B.R. 45
D. Mass.2014Background
- Two consolidated bankruptcy appeals involve whether belatedly filed state tax returns are “returns” for discharge under 11 U.S.C. § 523(a)(1)(B)(i).
- Perkins seeks discharge of Massachusetts tax liabilities for 2004–2006; Department appeals after judgment for Perkins.
- Fahey seeks discharge of Massachusetts tax liabilities for 1997–2002 and 2004–2005; bankruptcy court denied discharge amounts and Department prevailed.
- Debtors filed late Massachusetts resident tax returns; filing dates were well after due dates.
- Act 2005 added an unnumbered paragraph defining “return” for discharge purposes, creating debate over timeliness and Beard-style tests.
- Massachusetts law requires filing by the 15th day of the fourth month after year-end; late filings are argued to be non-returns absent safe harbors.
- Court must determine whether the unnumbered paragraph’s “applicable filing requirements” include timeliness, affecting whether late-filed returns qualify as dischargeable returns.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether belated Massachusetts returns qualify as dischargeable returns under §523(a)(1)(B)(i). | Perkins/Fahey rely on Beard-based approach; late filing can still be a return. | Department contends the unnumbered paragraph requires adherence to applicable nonbankruptcy filing requirements, excluding late returns. | Perkins: Department prevails; Fahey: Department prevails; overall, late-filed returns fail the filing requirements and are not dischargeable. |
Key Cases Cited
- Beard v. Commissioner, 82 T.C. 766 (Mass. 1984) (defines a tax return for Beard analysis (pre-Act))
- In re Hindenlang, 164 F.3d 1029 (6th Cir. 1999) (Beard test applied to determine return under bankruptcy discharge)
- In re Wogoman, 475 B.R. 245 (D. Colo. 2013) (Beard test used to assess late-filed returns before discharge)
- In re Brown, 489 B.R. 1 (Bankr. D. Mass. 2013) (Late-filed returns may serve as returns if they satisfy filing requirements and precede assessment)
- In re Pendergast, 494 B.R. 8 (Bankr. D. Mass. 2013) (Plain text of hanging paragraph; timeliness considered part of filing requirements)
- In re McCoy, 666 F.3d 924 (5th Cir. 2012) (Safe harbor for §6020(a); returns filed under §6020(a) may qualify as returns for discharge)