Individuаl chapter 11 debtor Bruce Fein appeals the denial of discharge of priority tax claims. As the plain language of the Bankruptcy Code rеnders these claims nondis-chargeable, we affirm.
I.
In April 1991, Fein petitioned for relief under chapter 11 of the Bankruptcy Code. At that time, the Internal Revеnue Service (“IRS”) was auditing his liability for federal income taxes for the taxable years 1983, 1984, 1985, 1986, and 1989. Fein did not list the IRS as a creditor in his petition or schedules, but he notified it of his chapter 11 filing. The IRS did not file a proof of claim for any tax liabilities prior to confirmation of the plan. In December, Fein’s plan of reorganization was confirmed by the bankruptcy court.
In March 1992, the IRS issued a notice of deficiency to Fein for the taxable years 1983, 1984, 1985, and 1989 in the amounts of $8,566, $9,952, $4,518, $3,723, and $2,539, respectively. The deficiencies resulted from improper losses attributable to Fein’s participation in a tax-shelter partnership, Pеtro-Tech. The Commissioner also asserted addition to tax against Fein under 26 U.S.C. § 6621(c), which imposes an increased rate of interest when there is a “substantial underpayment attributable to tax motivated transactions”; under 26 U.S.C. § 6659 for an underpayment of tax which is attributable to a valuation overstatement; and under 26 U.S.C. § 6661 for a substantial understatement of income tax. Fein’s petition for rede-termination of the deficiencies and additions to tax is pending in the United States Tax Court.
Fein instituted an adversary proceeding in the bankruptcy court, claiming that the income tax deficiencies had been discharged by his bankruptсy proceeding. The bankruptcy court held that priority tax claims are not discharged in an individual chapter 11 proceeding and granted summary judgment tо the IRS. The district court affirmed.
II.
Title 11 U.S.C. § 1141(d)(1) provides generally that confirmation of a chapter 11 plan discharges pre-existing debts, regardless of whether a proof of claim was filed or the claim was allowed. Under § 1141(d)(2), confirmation does not discharge an individual debtor from any debt excepted from disсharge under 11 U.S.C. § 523, which excepts from discharge taxes entitled to priority under 11 U.S.C. § 507. Section 507(a)(7)(A)(iii) provides priority status for pre-petition federal income tax liabilities not yet assessed but still assessable, such as federal income tax liabilities still under audit.
It is not disputed that the taxes at issue in this case are priority taxes. Thus, under the plain language of the Bankruptcy Code, bankruptcy does not discharge a priority tax claim that has been neither assessеd nor filed.
See Grynberg v. United States (In re Grynberg),
Fein contends that a failure to discharge his tax claims would prejudice his reorganization, thereby undermining bankruptcy policy favoring a “fresh start” for debtors. Whilе we recognize the Bankruptcy Code’s interest in providing a “fresh start,” this broad goal is not sufficient to defeat the Code’s plain language to the contrary.
The courts of appeals that have considered this issue have concluded that in the case of individual debtors, Congress consciously opted to place a higher priority on revenue collection than on debtor rehabilitation or ensuring a “fresh start.”
See Grynberg,
Fein contends that
Grynberg
and
Gur-witch
are distinguishable because, unlike those debtors, he was unaware of the tax claim. This distinction is irrelevаnt. Congress was concerned about “hidden liabilities” and the “undesirable uncertainty” that they create, but only with respect to corporations and рartnerships.
In re Official Committee of Unsecured Creditors of White Farm Equip. Co.,
III.
Fein contends that the discharge of claims in bankruptcy serves as
res judicata,
barring the government’s claim. Because the Bankruptcy Code specifically makes this claim nоndisehargeable, however,
res judica-ta
does not bar it.
Gurwitch,
Fein contends that this case is controlled by
Republic Supply Co. v. Shoaf,
The court recognized that § 524 generally has been interpreted to preclude the release of guarantors in bankruptcy. Nonetheless, “the statute does not by its specific words preclude the discharge of a guaranty when it has been accepted and confirmed as an integral part of a plan or reorganization.” Id. at 1050. Here, in contrast, the tax liabilities were not a part of the plan, and the Code specifically provides that confirmation of the plan does not discharge such nondischargeable debts. Republic Supply, accordingly, is not controlling.
IV.
Fein contends that thе equitable doctrine of laches bars the government from
*634
asserting its tax liabilities. That doctrine prohibits a party from asserting a claim that has been unrеasonably delayed until such time as other parties have acted, or circumstances have changed resulting in severe prejudice becаuse of the delay.
See Albertson v. T.J. Stevenson & Co.,
We need not reach the substantive issue of whether the circumstances of this case are appropriate for the invocation of laches, as laches “may not be asserted against the United States when it is acting in its sovereign capacity to enforce a public right or protect the public interest.”
See United States v. Popovich,
Because the liabilities were asserted within the statute of limitations and the lach-es doctrine does nоt apply, Fein’s argument that IRS prejudiced other parties by waiting until after confirmation is irrelevant. Making these liabilities dischargeable will inevitably creаte some uncertainty for individual reorganization plans. When such uncertainty manifests itself, there is no reason to suppose that prejudice will result оr to recognize any prejudice that does result. “Inasmuch as [these taxes] are nondischargeable, ... a reasonable debtor should expect that the IRS will seek to enforce such claim.”
In re Becker’s Motor Transp.,
Finding no error, we AFFIRM the judgment that Fein’s priority tax liabilities in this case were not discharged by his chapter 11 petition.