Wogoman v. Internal Revenue Service (In re Wogoman)
475 B.R. 239
10th Cir. BAP2012Background
- Debtors filed Chapter 7 on January 20, 2011 seeking discharge of certain tax debts.
- IRS admitted 2000, 1998, 2002, and 2005 taxes were dischargeable; dispute centered on 2001 taxes.
- Debtors did not file a 2001 return by the due dates; a preparer notified them of non-filing in 2003.
- IRS assessed the 2001 deficiency on February 21, 2005; debt recorded prior to any late filing.
- Debtors filed a Form 1040 for 2001 on August 1, 2006; IRS abated part of the liability in November 2006 and later obtained an installment agreement.
- Bankruptcy court ruled on August 19, 2011 that the 2001 tax debt was nondischargeable; this appeal followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether post-assessment Form 1040 is a return under §523(a)(1)(B)(i). | Wogomans contend the statute does not require pre-assessment filing. | IRS argues late filings do not meet nonbankruptcy law filing requirements and are not returns. | Yes; the post-assessment 2001 return is not a return under the statute. |
| What standard applies to determining return status post-BAPCPA (Beard/Hindenlang vs. McCoy). | Wogomans urge pre-BAPCPA Beard/Hindenlang four-prong test. | IRS urges McCoy’s reading of the hanging paragraph as controlling. | Applicable; regardless of standard, 2001 liability is nondischargeable. |
| Does the hanging paragraph create a safe harbor for §6020(a) returns or render all late returns nondischargeable. | Wogomans rely on text implying potential returns qualify if under §6020(a). | IRS argues safe harbor is narrow; late returns generally not dischargeable. | Even if safe harbor exists, 2001 Form 1040 does not meet it; nondischargeable. |
Key Cases Cited
- In re Hindenlang, 164 F.3d 1029 (6th Cir. 1999) (Beard test applied to dischargeability of post-assessment returns (origins of four-prong test))
- In re Moroney, 352 F.3d 902 (4th Cir. 2003) (Late-filed returns not dischargeable under Beard-type analysis)
- In re Colsen, 446 F.3d 836 (8th Cir. 2006) (Beard test with stricter view on honesty of filing; later circuits diverge)
- In re McCoy, 666 F.3d 924 (5th Cir. 2012) (Hanging paragraph interpreted as creating safe harbor for §6020(a) returns; depends on interpretation)
- In re Bergstrom, 949 F.2d 341 (10th Cir. 1991) (Substitute IRS returns not treated as debtor returns under §523(a)(1)(B)(i))
- Beard v. Commissioner, 82 T.C. 766 (1984) (Origins of the four-prong Beard test for returns in dischargeability)