164 F.3d 1029 (6th Cir. 1999), 97-4321, In re Hindenlang
|Citation:||164 F.3d 1029|
|Party Name:||41 Collier Bankr.Cas.2d 351, In re William C. HINDENLANG, Debtor. United States of America, Appellant, v. William C. Hindenlang, Appellee.|
|Case Date:||January 22, 1999|
|Court:||United States Courts of Appeals, Court of Appeals for the Sixth Circuit|
Argued Oct. 30, 1998.
[Copyrighted Material Omitted]
Robert W. Metzler (argued and briefed), Kenneth L. Greene (briefed), U.S. Department of Justice, Appellate Section Tax Division, Washington, D.C., for Appellant.
William B. Fecher (argued and briefed), Alan J. Statman (briefed), Reisenfeld & Statman, Cincinnati, Ohio, for Appellee.
Before: DAUGHTREY and MOORE, Circuit Judges; COHN, [*] District Judge.
MOORE, Circuit Judge.
William C. Hindenlang, a Chapter 7 debtor in bankruptcy, seeks to discharge certain federal tax liabilities under 11 U.S.C. § 727. The United States argues that Hindenlang falls under the exceptions to discharge provision in 11 U.S.C. § 523(a)(1)(B), which prohibits discharge of taxes for which the debtor did not file a return. Here, Hindenlang filed Forms 1040 only after the Internal Revenue Service ("IRS") had calculated its own assessment of Hindenlang's liability by its authority under 26 U.S.C. § 6201, after which Hindenlang's late-filed forms served no purpose under tax law, and therefore the United States argues that his Forms 1040 were no longer "returns" under § 523(a)(1)(B). The district court ruled in favor of Hindenlang. We hold that Hindenlang's Forms 1040 were not returns, and we therefore REVERSE the judgment of the district court.
I. FACTS AND PROCEDURE
The basic facts are not in dispute. William Hindenlang did not file federal income tax returns for years 1985 through 1988. The IRS sent Hindenlang notice of proposed deficiency letters ("thirty-day letters") for years 1985 through 1987 in April of 1990, and one such letter for the 1988 taxable year in December of 1990. When the debtor did not consent to the proposed liability, the IRS prepared substitute returns ("Substitutes for Returns" or "SFRs") for the relevant years and sent them to Hindenlang. See 26 U.S.C. § 6020(b). Again Hindenlang neither responded to nor executed the SFRs, leading the IRS to send out formal notice of deficiency letters ("ninety-day letters"). 1 Hindenlang did not file a petition in the Tax Court challenging any of these deficiency notices. Therefore, in 1991, after waiting the statutorily prescribed ninety days, the IRS assessed the deficiencies against Hindenlang.
Finally, in 1993, two years after assessment, Hindenlang sent the IRS what was purported to be individual income tax returns for the years in question. 2 Hindenlang used the proper Forms 1040, see 26 C.F.R. § 1.6012-1(a)(6), and calculated the taxes substantially the same as in the SFRs previously prepared by the IRS. Hindenlang still did not pay any of the deficiencies.
On January 22, 1996, Hindenlang filed a Chapter 7 bankruptcy petition. He then instituted an adversary proceeding seeking a bankruptcy court determination that the tax liability in question was dischargeable pursuant to 11 U.S.C. § 727(a). 3 Both parties moved for summary judgment. The bankruptcy court granted summary judgment to Hindenlang, and the district court affirmed. See United States v. Hindenlang (In re Hindenlang ), 214 B.R. 847 (S.D.Ohio 1997).
Bankruptcy court orders granting summary judgment are final appealable orders and are reviewable by the district court. See Oakland Gin Co. v. Marlow (In re Julien Company ), 44 F.3d 426, 428 (6th Cir.1995). We have jurisdiction over bankruptcy appeals pursuant to 28 U.S.C. § 158(d), which authorizes appellate jurisdiction over final
decisions of the district courts that reviewed bankruptcy court determinations pursuant to § 158(a).
Standard of Review
The issue of whether Forms 1040 filed after the IRS has made an assessment can constitute returns for purposes of § 523(a)(1)(B) is a question of law, to be reviewed de novo. See Wesbanco Bank Barnesville v. Rafoth (In re Baker & Getty Fin. Servs.), 106 F.3d 1255, 1259 (6th Cir.), cert. denied, --- U.S. ----, 118 S.Ct. 65, 139 L.Ed.2d 27 (1997). For purposes of summary judgment, this court must consider all the relevant facts in a light most favorable to the nonmoving party and determine whether the movant must prevail as a matter of law. See General Elec. Co. v. G. Siempelkamp GmbH & Co., 29 F.3d 1095, 1097 (6th Cir.1994). There are no material disputed fact issues in this case, so we proceed to the legal issue.
Definition of Return Under § 523(a)(1)
The issue in this case is the meaning of the word "return" under § 523(a)(1) of the Bankruptcy Code. The section reads:
(a) A discharge under section 727 ... of this title does not discharge an individual debtor from any debt--
(1) for a tax or a customs duty--
(A) of the kind and for the periods specified in section 507(a)(2) or 507(a)(8) of this title, whether or not a claim for such tax was filed or allowed;
(B) with respect to which a return, if required--
(i) was not filed; or
(ii) was filed after the date on which such return was last due, under applicable law or under any extension, and after two years before the date of the filing of the petition; or
(C) with respect to which the debtor made a fraudulent return or willfully attempted in any manner to evade or defeat such tax.
11 U.S.C. § 523(a)(1) (emphasis added).
Under this provision, when a debtor files for bankruptcy, "tax on or measured by income or gross receipts" for the last three taxable years is not dischargeable. See 11 U.S.C. §§ 507(a)(8)(A), 523(a)(1)(A). Furthermore, only taxes for which a return was filed more than two years before the petition for bankruptcy are dischargeable. See § 523(a)(1)(B)(ii). Finally, if "the debtor made a fraudulent...
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