This appeal involves two jurisdictional issues as well as interpretation of a provision of the Bankruptcy Abuse Prevention and Consumer Protection Act of- 2005 (“BAPCPA”). With regard to the bankruptcy issue, this Court must resolve whether an above-median-income debtor who has no monthly vehicle loan or lease payment can claim a vehicle ownership expense deduction when calculating his disposable income. For the reasons explained below, we reverse the district court.
I. Background
The debtors, Marvin Ross-Tousey and Deborah Tousey, filed a voluntary bankruptcy petition under chapter 7 of the Bankruptcy Code on August 18, 2006. The debtors live in Mattoon, Wisconsin and are each longstanding employees of the Mohican North Star Casino in Bowler, Wisconsin. In connection with their bank *1151 ruptcy filing, the debtors reported household income above the applicable state median income level.
BAPCPA subjects above-median-income debtors to a means test. The purpose of the means test is to distinguish between debtors who can repay a portion of their debt and debtors who cannot. Under the means test, if a debtor has enough disposable income to pay his unsecured creditors at least $166.67 1 each month (that is, at least $10,000 over five years), the debtor usually should proceed under Chapter 13, which allows for a partial repayment of debt. If the debtor has $166.67 or more of disposable income under the means test, proceedings under Chapter 7 — which allows for a complete discharge of debt — arе considered presumptively abusive. See 11 U.S.C. § 707(b) (2) (A) (ii) (I).
The means test uses a formula to determine a debtor’s ability to pay a portion of his debts. Essentially, the means test takes the debtor’s current monthly income (“CMI”) and reduces it by amounts corresponding to allowed monthly expenses set out in 11 U.S.C. § 707(b)(2)(A)(ii)-(iv). Pertinent to this appeal, under § 707(b)(2)(A)(ii)(I), debtors are permitted to deduct
the debtor’s applicable monthly expense amounts specified under the [Internal Revenue Service’s] National Standards and Local Standards, and the debtor’s actual monthly expenses for the categories specified as Other Necessary Expenses issued by the Internal Revenue Service for the area in which the debtor resides.... Notwithstanding any other provision of this clause, the monthly expenses of the debtor shall not include any payments for debts.
In performing their means test, the debtors here claimed the Internal Revenue Service (“IRS”) Local Standard vehicle operating/public transportation allowance of $358 as well as the IRS Local Standard vehicle ownership allowance of $803 (for two vehicles). With these expenses subtracted from their CMI, the debtors’ means test resulted in a finding that they had no disposable income. The debtors thus claimed that the presumption of abuse did not arise in their case and that they should be able to discharge their debts under Chapter 7.
On October 30, 2006, the United States Trustee (“UST”) filed a motion to dismiss the debtors’ case for abuse under section 707(b). Originally, the UST filed the motion under 11 U.S.C. § 707(b)(3)(B), asserting that the debtors’ chapter 7 petition was abusive based upon the totality of the circumstances of the debtors’ financial situation. A few days later — after the deadline set by § 704(b)(2) for UST motions to dismiss had passed — the UST supplemented its October 30 motion to dismiss, asserting that the case also merited a presumption of abuse under section 707(b)(2) because the debtors should not have taken the $803 Local Standard vehicle ownership deduction. On December 14, 2006, the bankruptcy court denied the UST’s motion to dismiss, concluding that the totality of the circumstances did not establish abuse and that no presumption of abuse arose under section 707(b)(2) due to the vehicle ownership deduction. The bankruptcy court interpreted section 707(b)(2)(A)(ii)(I) to allow the debtors to take the vehicle ownership deduction even though the debtоrs had no monthly loans or leases on their vehicles.
*1152
The UST appealed and the district court reversed with regard to the section 707(b)(2) presumption of abuse, holding that the debtors could not claim the vehicle ownership deduction under section 707(b) (2) (A) (ii) (I) for vehicles the debtors owned outright.
See Neary v. Ross-Tousey (In re Ross-Tousey),
The debtors appealed to this court. The UST moved to dismiss the appeal fоr lack of finality because the bankruptcy court had not yet determined whether the debtors had special circumstances sufficient to rebut the presumption. However, the debtors responded by stating that they had no special circumstances to raise on remand. Due to that concession, the UST agreed that this Court had jurisdiction in its reply brief. This Court denied the UST’s motion to dismiss the appeal on February 15, 2008.
II. Discussion
A. Jurisdiction
Before turning to the merits of this appeal, the Court addresses two jurisdictional questions.
1. Finality
The first jurisdictional question is whether there is a final order appropriate for appellate review in this case. This court has jurisdiction over “appeals from all final decisions, judgments, orders, and decrees entered” by a district court pursuant to its review of final decisions of a bankruptcy court. 28 U.S.C. § 158(d)(1). In other words, we have jurisdiction only “if both the bankruptcy court’s order and the district court’s order reviewing that original order are final decisions.”
Zedan v. Habash,
With regard to the first question, normally a denial of a motion to dismiss is not an appealable final order.
See Hammond v. Kunard,
*1153
Here, the bankruptcy court denied the UST’s motion to dismiss under sections 707(b)(2) and 707(b)(3)(B). This decision resolved all of the contested issuеs on the merits and left only the distribution of estate assets to be completed. Because distribution of assets is a ministerial act,
see In re Official Comm. of Unsecured Creditors,
The district court’s order was also final and appealable. As mentioned above, the district court reversed the bankruptcy court’s denial of the motion to dismiss and remanded to the bankruptcy court for further proceedings.
See Ross-Tousey,
2. Untimeliness
The second jurisdictional issue is whether the UST’s untimely raising of the section 707(b)(2) grounds for dismissal deprives this court of jurisdiction. Section 704(b)(2), as mentioned above, sets a deadline for filing motions to dismiss chapter 7 cases for presumed abuse under section 707(b)(2). See 11 U.S.C. § 704(b)(2). In this case, the UST timely filed its initial motion to dismiss on October 30, 2006. The October 30 motion argued thаt the case should be dismissed because of the totality of the debtor’s circumstances. The UST did not raise the section 707(b)(2) claim for presumed abuse until it supplemented its dismissal motion on November 2. The November 2 supplement referenced Fed.R.Civ.P. 15, which allows an amendment as a matter of course before a responsive pleading is filed, and allows such an amendment to relate back to the date of the original filing in certain circumstances. But, as the UST now concedes in briefing, Rule 15 did not apply to its motion to dismiss and was thus improperly invoked. See Fed. R. Bankr.P. 9014 (governing contested matters in bankruptcy but not incorporating Fed. R. Bankr.P. 7015, the Rule 15 analog in bankruptcy proceedings). The debtors did not object to the tardy supplement, nor did they raise the untimeliness issue in the district court or in their opening brief before this court.
The question for us is whether the deadline for UST motions to dismiss provided in section 704(b)(2) is jurisdictional in nature. There are two possibilities: (a) that the time limit for UST motions to dismiss is jurisdictional, such that untimeliness of the UST’s section 707(b)(2) supplement deprived the bankruptcy court of jurisdiction to entertain those grounds for dismissal; or (b) that the time limit is not jurisdictional and the debtors waived their objection to the UST’s late filing by failing to object. The UST claims that any objection to its untimely filing has been waived because section 704(b)(2)’s deadline for UST motions to dismiss is not jurisdictional. Statutory limits, it claims, are only jurisdictional when Congress “clearly states” that they are jurisdictional. The debtors argue for the first time in their Reply Brief that “[i]f the motion under sec. 707(b)(2) were untimely, it resolves the appeal” because “[t]he lack of a timely objection should deprive the court of jurisdiction to entertain the motion to dismiss on that basis.”
In
Bowles v. Russell,
Bowles
suggests that where a filing deadline is set by statute, the time limit in question could be jurisdictional.
See Bowles,
Thus, although
Bowles
implies that all statutory time limits may have jurisdictional significance, the Supreme Court’s later discussion of statutes of limitations in
John R. Sand & Gravel Co.
appears to soften
Bowles’s
implications, at least for run-of-the-mill statutes of limitations and statutory time limits like the one at issue here. In this case, although the section 704(b)(2) deadline for UST motions to dismiss has the salutary effect of promoting judicial efficiency, we believe that its primary purpose is to protect possibly cash-strapped debtors from needlessly protracted or delayed bankruptcy proceedings. Because section 704(b)(2)’s main purpose is to protect debtors, we believe that its protections, like those of the vast majority of statutory time limits, can be waived by the debtors as well.
3
See John
*1156
R. Sand & Gravel Co.,
C. Vehicle Ownership Deduction Under BAPCPA
The only issue on the merits in this case is whether, in conducting their means test under section 707(b), the debtors may claim a vehicle ownership expense for a vehicle that is not encumbered by a debt or lease. We review this issue of statutory interpretation de novo.
See U.S. v. Thornton,
As noted above, the chapter 7 means test defines “monthly expenses” as follows:
The debtor’s monthly expenses shall be the debtor’s applicable monthly expense amounts specified under the National Standards and Local Standards, and the debtor’s actual monthly expenses for the categories specified as Other Necessary Expenses issued by the Internal Revenue Service for the area in which the debtor resides.... Notwithstanding any other provision of this clause, the monthly expenses of the debtor shall not include any payments for debts.
11 U.S.C. § 707(b)(2)(A)(ii)(R. The National and Local Standards referenced in the statute are found in the IRS’s Financial Analysis Handbook which is, in turn, contained in the IRS’s Internal Revenue Manual (“IRM”). 4 Revenue agents use the IRM to assess the financial condition of delinquent taxpayers in order to determine how much they can afford to pay back to the government. The IRM specifies three types of expenses: National Standards, Local Standards, and Other Expenses. See IRM § 5.15.1.7. The IRM’s Local Standards set out two categories of expenses: transportation and housing/utilities. There are two components of the transportation standard: a nationwide allowanсe for ownership costs and an allowance to cover the cost of operating one or two motor vehicles or the cost of public transportation. See IRM § 5.15.1.
In this case, the district court concluded that the debtors could not take the vehicle ownership deduction because they had no monthly car payment and so had no “applicable monthly expenses.” The debtors argue that the district court erred in its interpretation because the statute specifically differentiates between “applicable” monthly expenses (which include the transportation ownership deduction) and “actual” monthly expenses. Under the debtors’ reading, “applicable” expenses are those that apply to the debtors by virtue of their geographic region and number of cars, regardless of whether the debtor has an actual loan or lease payment.
This issue has been heavily litigated, and there is a close split among courts that have addressed it.
See In re Ransom,
In determining whether a debtor is entitled to take the ownership deduction, courts have generally taken two approaches. These approaches have generally been called the “IRM apprоach” and the “plain language” approach. 6 As explained below, we believe that the plain language approach — which allows the vehicle ownership deduction even where the debtors have no monthly car payment — is the better interpretation.
1. Statutory Language
To analyze this issue, we begin with the language of the statute. When the language is plain, the sole function of the courts is to enforce the statute according to its terms.
See Lamie v. United States Trustee,
However, courts in the plain language camp argue that “applicable” refers to the selection of an expense amount corresponding to the appropriate geographic region and number of vehicles owned by the debtor.
See, e.g., In re Grunert,
We are persuaded that the plain language view of section 707(b)(2)(A)(ii)(I) is more strongly supported by the language and logic of the statute. In order to give effect to all the words of the statute, the term “applicable monthly expense amounts” cannot mean the same thing as “actual monthly expenses.” Under the statute, a debtor’s “actual monthly expenses” are only relevant with regard to the IRS’s “Other Necessary Expenses;” they are not relevant to deductions taken under the Local Standards, including the transportation ownership deduction. Since “applicable” cannot be synonymous with “actual,” applicable cannot reference what the debtor’s actual expense is for a category, as courts favoring the IRM approach would interpret the word. We conclude that the better interpretation of “applicable” is that it references the selection of the debtor’s geographic region and number of cars.
We also take note of two additional points in connection with the statutory language. First, as the Sixth Circuit BAP pointed out in
Kimbro,
section 707(b)(2)(A)(ii)(I) additionally states that “[notwithstanding any other provision of this clause, the monthly expenses of the debtor shall not include any payments for debts.” It is difficult to square this part of section 707(b)(2)(A)(ii)(I) with the IRM approach, which would only allow the vehicle ownership deduction on condition of a monthly debt payment.
See Kimbro,
2. Incorporation of IRM Analysis
The IRM approach is characterized as such because courts following it use the methodology of the IRM as an interpretivе guide for the means test. Decisions favoring the IRM view generally reason that we should look not only to the Local Standards themselves (which are simply dollar amounts) in conducting a debtor’s means test, but also to the manner in which the IRM uses the Local Standards in the revenue collection process.
See, e.g., Ransom,
*1159
IRS agents use the Local Standards as caps on what a delinquent taxpayer may claim as living expenses when calculating what the taxpayer can pay back to the government.
See
IRM § 5.15.1.7 (stating, regarding the local standards, that “[flax-payers will be allowed the local standard or the amount actually paid, whichever is less”) (emphasis in original). Under IRS methodology, if a taxpayer has no car payment, the taxpayer is entitled only to the transportation operation deduction, not the ownership deduction.
See id.
(“If a taxpayer has a car, but no car payment [sic] only the operating cost portion of the transportation standard is used to figure the allowable transportation expense.”). As the Ninth Circuit BAP explained in
Ransom:
because the IRS Manual “prohibits the debtor from asserting the vehicle ownership expense deduction when he or she has no loan or lease payments on a vehicle, [courts taking the IRM approach] reason that § 707(b)(2)(A)(ii)(I) does not allow such a deduction either.”
Ransom,
However, while the IRM provides a useful methodology to IRS agents for determining a taxpayer’s ability to pay the IRS, we agree with other plain language courts that there is no indication that Congress intended that mеthodology to be used in conducting the means test. As an initial matter, section 707(b)(2)(A)(ii)(I) makes reference only to the “amounts specified” in the Local Standards; the statute does not incorporate the IRM or the Financial Analysis Handbook, or even refer to them.
See
11 U.S.C. § 707(b)(2)(A)(ii)(I) (making no reference to the IRM, the Financial Analysis Handbook or their methodologies). The legislative history of section 707(b)(2)(A)(ii)(I) confirms that the provision’s silence with regard to the IRM and IRS methodology was deliberate. A prior version of a bill can be useful in interpreting a bill that was subsequently enacted.
See, e.g., In re Lifschultz Fast Freight Corp.,
(A) the expense allowances under the applicable National Standards, Local Standards, and Other Necessary Expenses allowance (excluding payments for debts) for the debtor ... in the area in which the debtor resides as determined under the Internal Revemte Service financial analysis for expenses in effect as of the date of the order for relief.
H.R. 3150, 105th Congress (1998) (emphasis added). The phrase “as determined under the Internal Revenue Service financial analysis” was later removed and replaced by the current language, which states that the debtor should deduct the “аpplicable monthly expense amounts specified under the National and Local Standards.” 11 U.S.C. § 707(b) (2) (A) (ii) (I). This change indicates Congress’s intent that courts not be bound by the financial analysis contained in the IRM and supports the conclusion that courts should look only to the numeric amounts set forth in the Local Standards.
See Kimbro,
In addition to the fact that neither the statutory text nor history support using IRM methods in the means test, there are also practical reasons why it is inappropriate to look to the IRM, namely that the substantial discretion allowed to a revenue officer under the IRM is inconsistent with the purpose of the means test to adopt a uniform, bright-line test that eliminates judicial discretion. As explained in Kimbro:
Congress intended that there be uniform and readily-applied formula for determining when the bankruptcy court should presume that a debtor’s chapter 7 petition is an abuse and for determining an above-median debtor’s disposable income in chapter 13. By explicitly referring to the National and Loсal Standards, Congress incorporated a table of standard expenses that could be easily and uniformly applied; Congress intended that the court and parties simply utilize the expense amount from the applicable column based on the debtor’s income, family size, number of cars and locale. The amounts are entered into the means test form and a determination of disposable income is accomplished without judicial discretion. The clear policies behind the means test were the uniform application of a bright-line test that eliminates judicial discretion. Plainly, Congress determined that these policies were more important than accuracy.
However, if the IRM were used to determine the amounts of expenses ... the means test would of necessity again be a highly discretionary test, because under the IRM, a revenue officer is afforded significant discretion in determining a taxpayer’s ability to pay a tax debt.
Kimbro,
In sum, because we believe that reference to IRM methodology is inconsistent with the statutory language, history, and purpose, we do not turn to it in interpreting the means test.
3. Policy
We also believe that policy considerations support allowing the ownership deduction to debtors who own their cars outright. It is common sense that there are costs associated with vehicle ownership apart from loan or lease payments. (And of course, in some sense, debt payments are not really “ownership costs” at all.) These non-debt сosts include depreciation, insurance, licensing fees and taxes.
See Kimbro,
Limiting the deduction to debtors who make car payments would also produce arbitrary and unfair results. The debtor who completes his last car payment just before filing would not be allowed the deduction, while the debtor who has one car payment remaining a few days after filing would be allowed to take it. As Bankruptcy Judge Eugene Wedoff commented in his article exploring the BAPCPA means test: Allowing the ownership deduction to debtors who own their vehicles outright “avoids arbitrary distinctions between debtors who have only a few car payments left at the time of their bankruptcy filing and those who finished making their car payments just before the filing.” Wedoff, 79 Am. Bankr.LJ. at 258. We also think it unfair to “punish” debtors who choose to drive older or cheaper vehicles that they own rather than borrow money to obtain newer or more expensive cars, especially in light of the fact that one of BAPCPA’s purposes was to make it more difficult to discharge consumer debts.
Finally, we acknowledge that courts following the IRM approach believe that our reading is inconsistent with one of the main purposes of BAPCPA: that “creditors [ ] be repaid when possible.”
See, e.g., Ransom,
III. Conclusion
For the reasons еxplained above, we hold that a debtor who owns his car free and clear may take the Local Standard transportation ownership deduction under the section 707(b)(2)(A)(ii)(I) means test. Accordingly, we REVERSE the district court and REMAND for further proceedings. We instruct the district court to consider the alternative argument briefed below by the UST, that the totality of the circumstances of the debtors’ financial situation demonstrate abuse under section 707(b)(3)(B).
Notes
. This dollar amount was increased under 11 U.S.C. § 104 effective April 1, 2007, but the increased amount does not apply in this case.
. We agree with the UST that a finding of jurisdiction in this case is not contrary to
In re Jartran, Inc.,
. We note that our sister circuits have also not interpreted
Bowles
as transforming all federal statutory time limits into jurisdictional bars. For example, in interpreting the deadlines contained in the Anti-Terrorism and Effective Death Penalty Act ("AEDPA”) — which would seem to be more directed at promoting judicial efficiency and less at protecting litigants than the deadline here — circuit courts have consistently held that
Bowles
did not transform the relevant statutory time limits into jurisdictional bars.
See, e.g., Coker v. Quarterman,
. The IRM, including the Financial Analysis Handbook, can be found on the IRS website, at http://www.irs.gov/irm.
.
Ransom
and several other cases used in our analysis deal with confirmation of a plan under chapter 13. These cases are instructive in chapter 7 cases because chapter 13 uses the means test of section 707(b)(2)(A)(ii)(I) to determine the debtor's projected disposable income.
See In re Sawicki,
No. 2-07-BK3493-CGC,
. Because most courts have referred to the two sides of this debate in this manner, we use these labels for ease of analysis and recognition. However, courts which have differed from our present ruling should not be viewed as rejecting the “plain language” of the statute. Although we do not adopt it, the IRM view is supported by many thoughtful decisions, all of which believed that it was the proper interpretation of the statute.
See Pearson,