Rhodes v. United States (In re Rhodes)
498 B.R. 357
Bankr. N.D. Ga.2013Background
- Chapter 7 debtor seeks discharge of federal income tax liabilities for 1999–2003 and 2005; United States moves for partial summary judgment that 1999–2000 taxes are non-dischargeable under §523(a)(1)(B)(i) for no filed return.
- Debtor filed late 1999 and 2000 returns after IRS assessments; IRS filed liens.
- IRS assessed 1999 taxes in Dec 2002 and 2000 taxes in May 2003; 1999 liability increased after late return; 2000 liability abated.
- Debtor filed 1999 and 2000 returns in Sept 2006; the IRS adjusted liabilities accordingly.
- Court must determine whether late post-assessment returns qualify as “returns” under §523(a)(*)- and Beard test; summary judgment denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether late post-assessment returns qualify as returns under §523(a)(*) | United States: late returns do not qualify | Debtor: late returns may qualify as returns under §523(a)(*) | Genuine questions of fact; Beard test may apply; not decided on summary judgment. |
| Whether §523(a)(*)’s definition includes timeliness as a requirement | United States: timeliness required | Debtor: timeliness not required by §523(a)(*) | Timeliness not required for the definition of 'return' under §523(a)(*) per court. |
| Whether Beard four-prong test governs for late post-assessment returns | United States: Beard test governs and likely dispositive | Debtor: Beard test applies but needs factual showing | Beard test applicable; issues of fact remain as to all prongs. |
| Whether the Debtor’s late returns satisfy the fourth prong of Beard (honest and reasonable attempt) | United States: not satisfied | Debtor: may satisfy based on form and data | Court cannot resolve on summary judgment; factual inquiry needed. |
Key Cases Cited
- Beard v. Commissioner, 82 T.C. 766 (1986) (origin of Beard four-prong test for returns under §523(a)(1)(B))
- In re Hindenlang, 164 F.3d 1029 (6th Cir. 1999) (established four-prong Beard test)
- In re Payne, 431 F.3d 1055 (7th Cir. 2005) (adopts Beard test for post-assessment returns)
- In re Moroney, 352 F.3d 902 (4th Cir. 2003) (Beard test adopted in fourth circuit)
- In re Colsen, 446 F.3d 836 (8th Cir. 2006) (honesty of return determined from face of form; subjective intent unnecessary)