In re Lawrence, Adv. No. 81-332

• Decision Date: 24 August 1981
• Docket Number: LR 80-28.,Adv. No. 81-332
• Citation: 19 BR 627
• Parties: Re Harry Gene LAWRENCE, Debtor. Harry Gene LAWRENCE, Plaintiff, v. COMMISSIONER OF INTERNAL REVENUE SERVICE, Defendant.
• Court: U.S. Bankruptcy Court — Eastern District of Arkansas

19 B.R. 627 (1981)

Re Harry Gene LAWRENCE, Debtor Harry Gene LAWRENCE, Plaintiff, v. COMMISSIONER OF INTERNAL REVENUE SERVICE, Defendant.

Adv. No. 81-332, LR 80-28.

United States Bankruptcy Court, E.D. Arkansas, W.D.

August 24, 1981.

Jack Sims, Little Rock, Ark., for debtor.

Sherry P. Bartley, Asst. U.S. Atty., Little Rock, Ark., for plaintiff.

A.L. Tenney, Trustee, Little Rock, Ark., for Trustee.

JUDGMENT

CHARLES W. BAKER, Bankruptcy Judge.

This Chapter 13 petition was filed January 9, 1980, in the United States Bankruptcy Court for the Eastern District of Arkansas, Western Division. The plan was confirmed, without objection, by an order dated January 5, 1981.

The Internal Revenue Service filed its proof of claim on June 13, 1980, alleging indebtedness for the 1976 tax year of $3,043.00 tax, $523.51 pre-petition interest, $177.17 post-petition interest and $106.51 post-petition penalty for a total of $3,850.14 due.

On May 20, 1981, the debtor filed complaint requesting that the Court order the IRS to turn over to the debtor $3,764.98 in tax over-payments by the debtor in tax years 1979 and 1980.

On June 5, 1981, the Court ordered that A.L. Tenney, Trustee, be allowed to intervene as a party plaintiff.

On June 17, 1981, the IRS filed an amended proof of claim waiving post-petition interest and penalty and claiming $3,043.00 tax due and $523.51 pre-petition interest for a total indebtedness of $3,566.51.

The defendant's answer of June 16, 1981, generally denying the allegations of the debtor's complaint and asserting its right to set off overpayments by the plaintiff from 1979 and 1980 against taxes due and owing it from the plaintiff for the 1976 tax year was supplemented by an amended answer and counterclaim filed June 29, 1981. The counterclaim asserted the counterclaimant's right to retention of the overpayments and set-off and further requested that the complaint be dismissed and the automatic stay be relaxed to allow set-off. The debtor's reply was filed July 2, 1981.

A hearing was held June 19, 1981, Room 445 United States Courthouse, Little Rock, Arkansas. After hearing, the IRS was directed to file its brief no later than July 10, 1981. The debtor was given until July 24, 1981, to file his brief and the defendant was given until July 31, 1981, to reply. All parties have complied with the Court's order.

In the briefs, all parties agreed with the defendant's statement of the facts in the case which read:

"Assessments for federal income taxes for the year 1976 were made against the plaintiff herein on December 31, 1979 in the amounts of $3,043. in tax and $519.04 in interest. On the same day notice of the assessments was given to and demand for payment thereof was made upon the plaintiff. The plaintiff has since then refused and neglected to pay the assessments, and there is presently due and owing on the above assessments a total principal balance of $3,562.04, plus interest and statutory additions thereon from the date of the assessments.

"During the year 1979 income taxes were withheld from the wages of the plaintiff in the total amount of $2,321. Plaintiff timely filed an income tax return for the year 1979 which showed tax due in the amount of $208. Withheld taxes in that amount were applied in satisfaction of the 1979 tax, and the balance of the withheld taxes in the amount of $2,113. was retained by the Internal Revenue Service.

"During the year 1980 income taxes were withheld from the plaintiff\'s wages in the total amount of $3,259. Plaintiff timely filed an income tax return for the year 1980 which showed tax due in the amount of $450.00. Withheld taxes in that amount were applied in satisfaction of the 1980 tax, and the plaintiff was issued a refund in the amount of $1,157.02. The balance of the withheld taxes in the amount of $1,651.98 was

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