Leona Tuttle, debtor in a Chapter 11 bankruptcy case, appeals from a decision of the Bankruptcy Appellate Panel (BAP) holding that, even after confirmation and successful completion of her Chapter 11 plan, she remains personally *1240 liable for “gap interest,” i.e., interest that accrued between the date her petition was filed and the date her plan was confirmed, on a nondischargeable tax debt to the Internal Revenue Service (IRS). We exercise jurisdiction pursuant to 28 U.S.C. § 158(d) and affirm.
I.
Tuttle and her husband filed a Chapter 11 bankruptcy petition in April 1993. The IRS filed an amended claim for $53,997.35. Of this amount, $40,519.17 was for a priority claim, and $13,478.18 represented a general unsecured claim. Tuttle’s Chapter 11 reorganization plan was confirmed by the bankruptcy court in December 1999. Tuttle paid the total amount of the IRS claim pursuant to her reorganization plan. However, the IRS subsequently sought to recover, from her personally, gap interest totaling approximately $30,000 that accrued on its priority tax claim between the time she filed her bankruptcy petition and the time her plan was confirmed. 1
Tuttle filed a motion with the bankruptcy court to enforce the discharge she received on confirmation of her plan and to prohibit the IRS from collecting the gap interest. The bankruptcy court denied Tuttle’s motion, “reluctantly” concluding, based on Tenth Circuit precedent, “that gap interest on the IRS’s priority claim was not discharged by confirmation of the debtor’s plan” and that the IRS was “not estopped from trying to collect the interest.” App. at 98. In reaching this conclusion, the bankruptcy court emphasized that, absent existing Tenth Circuit precedent, it would have ruled in favor of Tuttle. On appeal, the BAP agreed with the bankruptcy court that, under Tenth Circuit precedent, “the gap interest owed to the IRS-[wa]s not dischargeable, but rather” Tuttle “remain[ed] personally liable for the gap interest.” Id. at 165.
II.
“In our review of BAP decisions, we independently review the bankruptcy court decision.”
In re Albrecht,
Tuttle contends the BAP and the bankruptcy court erred in concluding that gap interest was not discharged upon confirmation of her Chapter 11 plan and that she remains personally liable for the gap interest. Although Tuttle concedes that the BAP and the bankruptcy court followed Tenth Circuit precedent, she contends that precedent “should be rejected” either as dicta or “as inconsistent with the intent of the Bankruptcy Code.” Aplt. Br. at 5. In Tuttle’s view, gap interest in a Chapter 11 proceeding “is an integral part of a priority tax claim, and if the allowed claim is paid in full under a plan, the gap interest should be considered paid as well.” Id. at 6.
In addressing Tuttle’s arguments, we begin by reviewing how IRS claims for unpaid taxes are treated in Chapter 11 bankruptcy proceedings. Like other creditors, the IRS has the right to file a claim in a Chapter 11 bankruptcy proceeding to seek repayment of unpaid taxes. “If the IRS has a[n unsecured] claim for taxes for which the return was
*1241
due within three years before the bankruptcy petition was filed, the claim enjoys eighth priority under [11 U.S.C.] § 507(a)(8)(A)(i) and is nondischargeable in bankruptcy under § 523(a)(1)(A).”
Young v. United States,
— U.S. -, -,
At issue here is whether the IRS may also collect post-petition, pre-confirmation interest (i.e., gap interest) on the IRS’s priority tax claims. Like other creditors in bankruptcy proceedings, the IRS is generally precluded from including unmatured interest as part of its claim. Specifically, § 502(b)(2) of the Bankruptcy Code provides that unmatured interest cannot be allowed as a claim against the bankruptcy estate, 11 U.S.C. § 502(b)(2). The purpose of this rule is to “ensure[ ] convenient administration of cases and equity in distribution.”
United States v. Victor,
The IRS asserts that, because priority tax claims are nondischargeable in Chapter 11 proceedings, the debtor remains personally responsible for accruing gap interest. In support of its assertion, the IRS points to
Bruning v. United States,
In
Bruning,
the Supreme Court interpreted the provisions of the Bankruptcy Act of 1898 and held that, following discharge in bankruptcy, a debtor remained personally liable for post-petition interest that accrued on an unpaid, nondischargeable tax debt. In reaching this conclusion, the Court began by noting that § 17 of the Act provided that a debtor “remained personally liable after his discharge for that part of the principal amount of the tax debt and prepetition interest not satisfied out of the bankruptcy estate.”
Id.
at 360,
Although the parties dispute whether the provisions of the Bankruptcy Code, in particular the unique provisions of Chapter 11, mandate a different result than reached in
Bruning,
they agree that this court has adopted the
Bruning
rationale in two Chapter 11 cases:
Victor,
Tuttle suggests that the critical statements in
Victor
and
Fullmer
constitute dicta and therefore are not binding on the panel in this case.
See Bates v. Dep’t of Corrections,
It is a close question whether the critical statement in Victor can be considered dicta. The court in Victor was dealing with an oversecured tax claim asserted by the IRS (as opposed to the unsecured claim asserted here) and was specifically asked to determine whether the IRS’s failure to seek gap interest as part of its claim resulted in the gap interest being discharged upon plan confirmation. The IRS argued that the gap interest was not discharged because, it theorized, the interest was part of a nondischargeable tax debt that survived bankruptcy. The court rejected the IRS’s arguments:
*1243 Admittedly, interest that accrues on a nondisehargeable tax debt is an integral part of an underlying tax claim and is generally treated the same as the original claim. But here, that proposition lacks force unless the IRS’s secured claim qualifies as a nondisehargeable debt under the relevant sections of the Bankruptcy Code. We conclude that it does not.
A much closer question is whether the key statement in Fullmer was dicta. In Fullmer, the debtor filed a Chapter 11 proceeding and the IRS filed an unsecured claim for unpaid taxes. After the debtor’s plan was confirmed, the debtor made two large payments to the IRS, part of which was applied by the IRS to gap interest that had accrued on the unpaid taxes. The debtor objected to the IRS’s action, contending the IRS improperly exacted payment for the gap interest from the bankruptcy estate. This court disagreed:
We do not dispute the contention that unmatured interest, including interest accruing postpetition on a prepetition tax debt, is disallowed against the bankruptcy estate pursuant to 11 U.S.C. § 502(b)(2). However, [the debtor] paid the IRS the [money] after his plan was confirmed. Thus, the payment was made by him personally and not by the bankruptcy estate. Interest that accrues postpetition on a nondisehargeable prepetition tax debt survives bankruptcy as a personal liability. Because [the debtor] remained personally liable for ... the postpetition interest ... that accrued on his prepetition debt, the IRS was entitled to apply a portion of his personal payment to th[is] debt[ ].
Even assuming, for purposes of argument, that neither
Victor
nor
Full-mer
controls, the great weight of authority clearly supports applying
Bruning
to cases brought under the Bankruptcy Code, including Chapter 11 cases. Although a few bankruptcy courts have held
Bruning
inapplicable to Bankruptcy Code cases, those decisions subsequently were reversed.
E.g., In re Heisson,
Notwithstanding this weight of authority, Tuttle suggests there are various policy reasons why Bruning should not be applied to Chapter 11 cases such as hers. 4 Most notably, Tuttle argues that allowing the IRS to recover gap interest from a debtor who received a discharge in a Chapter 11 proceeding inevitably will undermine the debtor’s ability to successfully complete the confirmed plan. As noted by Tuttle, because such debtors generally have few assets with which to repay their confirmed plans, and because gap interest is not taken into account in such plans, most debtors will be unable to pay both the gap interest to the IRS and fulfill their remaining obligations under the plan.
While Tuttle’s policy arguments are not without merit, they cannot overcome the plain language of the Bankruptcy Code. As noted, § 1141(d)(2) specifically provides that confirmation of a Chapter 11 plan does not discharge a debtor from any debt listed in § 523. “Section 523(a)(1)(A), in turn, unequivocally notes that ‘[a] discharge under section ... [1141] ... does not discharge an individual debtor from any debt’ for a tax liability, irrespective of ‘whether or not a claim for such tax was filed or allowed.’ ”
Cousins,
Tuttle raises two additional issues, neither of which we find meritorious. First, Tuttle contends the bankruptcy court erred in determining that the IRS was not bound by the terms of her Chapter 11 plan insofar as it purported to satisfy “any and all claims” of the IRS. According to Tuttle, the confirmation of her plan “destroyed the [IRS’s] old claim, including any rights to gap interest.” Aplt. Br. at 6. Tuttle’s arguments are clearly foreclosed by the plain language of the Bankruptcy Code. Section 502(b)(2) of the Code specifically precluded the IRS from including gap interest as part of its claim against the estate. Thus, the plan’s reference to “any and all claims” asserted by the IRS did not encompass the gap interest now sought by the IRS. Further, Tuttle is wrong in asserting that confirmation of her plan some *1245 how “destroyed” her pre-petition tax debt to the IRS and any corresponding interest. As previously noted, § 1141(d)(2) specifically provides that confirmation of a Chapter 11 plan does not discharge a debtor from any debt listed in § 523, including priority tax claims.
In her second issue, Tuttle contends the bankruptcy court should have exercised its power under 11 U.S.C. § 105(a) (granting the bankruptcy court power to “issue any order, process, or judgment ... necessary or appropriate to carry out the provisions of this title”) to “rule that the obligation of the IRS has been paid in full.” Aplt. Br. at 26. In support of her contention, Tuttle offers several reasons why it would be inequitable to allow the IRS to collect gap interest after she successfully has completed her plan. While her equitable arguments are compelling, they cannot overcome the plain language of the Code.
The judgment of the United States Bankruptcy Appellate Panel is AFFIRMED.
Notes
. The bankruptcy court found, and the parties do not dispute, that "[n]either the debtor's counsel nor counsel appearing for the IRS before the plan was confirmed realized that the IRS had been accruing interest against the debtor on the priority portion of the debt for the six years between the time the debtors filed for bankruptcy and Mrs. Tuttle’s plan was confirmed." App. at 89.
. In
Victor,
we concluded that secured creditors, including the IRS, may seek payment of post-petition interest as part of the Chapter 11 plan if the value of the collateral exceeds the value of their claim.
. In
In re Grynberg,
. Although Tuttle attempts to lump Chapter 11 and Chapter 13 proceedings together, suggesting that all "reorganization cases” are significantly different than Chapter 7 cases, the fact is that the Bankruptcy Code treats Chapter 11 cases differently from Chapter 13 cases, at least in one important respect. In a Chapter 13 case, successful completion of a reorganization plan results in the debtor’s discharge of liability from accrued IRS claims. In contrast, Chapter 11 specifically provides that such claims survive the debtor's discharge in bankruptcy and remain valid against an individual debtor.
. Congress could, for example, amend the Code to allow for the collection of gap interest only if the debtor fails to successfully complete his or her confirmed Chapter 11 plan.