In re D'Avanza
| Decision Date | 29 June 1989 |
| Docket Number | Bankruptcy No. 87-3026-8P7,Adv. No. 87-365. |
| Citation | 101 BR 787 |
| Parties | In re Anthony R. D'AVANZA, Jr., Debtor. Anthony R. D'AVANZA, Jr., Plaintiff, v. The UNITED STATES of America and Internal Revenue Service, Defendant. |
| Court | U.S. Bankruptcy Court — Middle District of Florida |
B. Gray Gibbs, Saint Petersburg, Fla., for plaintiff.
Hillary Burchuck, for defendants.
ORDER ON MOTION FOR SUMMARY JUDGMENT
THIS CAUSE came on for hearing with notice to all parties in interest upon a Motion for Summary Judgment filed by Anthony R. D'Avanza, Jr. (Debtor), Plaintiff in this adversary proceeding. The Debtor seeks a determination that his 1981 and 1982 income tax liabilities are dischargeable obligations as a matter of law. The Court has considered the Motion, together with the record, has heard argument of counsel, and now finds the undisputed facts to be as follows:
On April 24, 1984, the Debtor filed his individual federal income tax return for the year ending December 31, 1981. On May 2, 1984, the Debtor contends that he mailed his individual federal income tax return for the year ending December 31, 1982. On June 4, 1987, the Debtor filed his Voluntary Petition for Relief under Chapter 7 of the Bankruptcy Code and subsequently instituted this adversary proceeding seeking an Order determining that his federal income tax liabilities for the years 1981 and 1982 are dischargeable in that the obligations do not come within the exception to discharge pursuant to § 523(a)(1)(B)(ii). It should be noted at this juncture, the Government concedes that the Debtor's tax liability for the year 1981 is a dischargeable obligation. Therefore, this Court's opinion shall be limited to the claim of dischargeability vel non of the Debtor's 1982 income tax liability.
With respect to the 1982 liability, the Debtor alleged in the Complaint that the tax return for that year was filed on or before a date two years before the date of the filing of his Petition. It appears, however, that the Internal Revenue Service (Government) has no record of ever receiving this income tax return and on November 28, 1984, made an assessment against the Debtor that included an audit deficiency, a negligence penalty, and a failure to file penalty and interest. This was accomplished by the use of a Form 870, "substitute for return", also known as a "dummy return" which was prepared by the Government to facilitate processing of the proposed assessments against the Debtor. Form 870 which is entitled "Waiver of Restrictions on Assessment and Collection of Deficiency in Tax and Acceptance of Overassessment" is a form used by the IRS to assess the tax liability of a particular taxpayer and create a return for that taxpayer who has failed to file such return. A Form 870 or "dummy return" signed by a taxpayer which contains sufficient information or data from which a tax can be computed has been found to constitute a return under § 275(a) of the Internal Revenue Code. Internal Revenue Ruling 74-203, U.S. v. Olgeirson, 284 F.Supp. 655 (D.N.D.1968), Germantown Trust Co. v. Commissioner, 309 U.S. 304, 60 S.Ct. 566, 84 L.Ed. 770 (1940)
Based on the foregoing, the Debtor contends that his income tax liability for the year 1982 is a dischargeable obligation in that it does not come within the exceptions to discharge contemplated in §§ 523(a)(1)(B)(i) or (ii). For this proposition, the Debtor asserts the following two theories as to why his 1982 return should be deemed to have been filed two years prior to the commencement of his case and, hence, dischargeable. The Debtor first contends that he mailed his 1982 income tax return in 1984 and although never received by the Government, the mailed return should be deemed to have been filed in 1984 more than two years prior to the commencement of his case. In the alternative, the Debtor contends that the dummy return prepared by the Government on November 28, 1984, has been recognized by other courts to be a filed return and since it was prepared in excess of the two years prior to the commencement of the Debtor's case, represents a dischargeable tax obligation.
In opposing the dischargeability claim of the Debtor, the Government contends first that the claim of the Debtor that he mailed the return is of no consequence and the return is only deemed to have been filed if it was received. Second, the Government contends that the dummy return with respect to the 1982 taxes should not be accepted as a proper substitute for a return filed by the taxpayer because this form can not provide the factual basis upon which the Court can find that Debtor's tax liabilities for 1982 are dischargeable.
The Court has considered the record relevant to the Motion for Summary Judgment filed by the Debtor and is satisfied that with respect to Count I of the Complaint, the Debtor is entitled to a determination that his tax liability is dischargeable. The Debtor's federal income tax return for the year ending December 31, 1981, was filed on April 24, 1984, clearly outside of three years before the date of the filing of his Petition for Relief under Chapter 7.
As to the Debtor's claim set forth in Count II which seeks a determination of the dischargeability of his federal income tax liability for 1982, the resolution of this claim is not without some difficulty. The Debtor contends that he mailed his return for 1982, but it is claimed by the Government that it never received the return. This, of course, in turn caused the Government to file the dummy return for the purpose of processing a proposed assessment against the Debtor for his 1982 income tax liability. This assessment was made on November 28, 1984, and clearly was made in excess of 240 days of the date...
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