Wendt v. United States (In re Wendt)
512 B.R. 716
Bankr. S.D. Florida2013Background
- Plaintiff Elizabeth Law Wendt seeks sanctions for alleged discharge-injunction violations by the United States after IRS activity to collect her 2004 tax liability.
- Tax for 2004 was due in 2005; extensions were granted to Aug 15, 2005 and Oct 15, 2005, but no return was filed by the extended deadline.
- IRS issued a Notice of Deficiency; assessment followed on Feb 28, 2008 for $6,956.15 based on the unchallenged deficiency.
- Plaintiff filed a late federal tax return in 2008; IRS abated portions of the tax in Feb 2009 after the late filing.
- Plaintiff entered into an IRS installment agreement in Aug 2009; nine payments of $50 were made in 2011.
- Plaint bankruptcy petition filed Nov 14, 2011; discharge entered Mar 20, 2012; IRS did not attempt collection before discharge.
- After discharge, IRS mailed notices in 2012 demanding unpaid 2004 tax; as of July 29, 2013 the balance was $398.49 plus interest.
- IRS moved for summary judgment on Jul 25, 2013; Court vacated earlier order and proceeded to hearing on Nov 25, 2013; motion granted.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether 2004 tax is excepted from discharge under 523(a)(1)(B)(i). | Wendt contends the 2004 liability arose from a deficient assessment without a return. | IRS asserts the debt exists by statute and is a tax obligation regardless of filing status. | Debt not discharged; tax obligation arises under statute and is excepted. |
| Whether late-filed return qualifies as a 'return' under 523(a). | Wendt argues Beard test applies to determine a dischargeable return. | IRS argues post-BAPCPA definition requires a return satisfying nonbankruptcy filing requirements; Beard no longer controls. | Late-filed return cannot satisfy 523(a) return definition post-BAPCPA; debt not dischargeable. |
| Whether plaintiff exhausted administrative remedies before filing this adversary proceeding. | Wendt asserts discharge-injunction violations were not properly pursued administratively. | IRS maintained remedies available and exhaustion occurred. | Plaintiff failed to exhaust administrative remedies; cannot prevail. |
Key Cases Cited
- Beard v. Commissioner, 82 T.C. 766 (Tax Court 1984) ( Beard four-prong test for return in pre-BAPCPA context)
- In re Casano, 473 B.R. 504 (Bankr.E.D.N.Y. 2012) (post-BAPCPA return definition consequences)
- In re McCoy, 666 F.3d 924 (5th Cir. 2012) (post-BAPCPA return definition prevents late-filed returns from qualifying)
- In re Colsen, 446 F.3d 836 (8th Cir. 2006) (pre-BAPCPA Beard test applied to return eligibility)
- In re Hindenlang, 164 F.3d 1029 (6th Cir. 1999) (Beard test used to evaluate return within discharge context)