this case wrong they got to run because they inserted their own words and their own verbiage and interpretation of an ambiguous statute this course or reverse the bankruptcy court and the  because the annuity at issue is not under the expressed terms of section four a way b of the internal revenue code qualified individual retirement and newly therefore it is not and should not be allowed to be claimed as exempt and qualify as an individual retirement annuity specifically to be an individual retirement annuity under four we'd be and the i'm just going to dress the two issues that are in dispute the two says the premiums are not fixed it also says the annual premium on behalf of an individual will not exceed the dollar amount is provided for in another provision of the internal revenue code which everyone agrees that this case is six thousand dollars so you're out of what we have here as an individual placing monies two hundred sixty seven thousand three hundred one thousand dollars for one one premium premiums are not even allowed there specifically prohibited under this contract so the premium is fixed and i was standing  bankruptcy court interpretation and that was standing in the bankruptcy appellate panels insertion of its own language into how it would read couple of things that we need to look after in the bankruptcy courts perspective not only did judge  nor the expressed language of the he took it upon himself to say what the legislature should have done as judge cristol quotes it's simply irrational to think that somehow congress would deny the exempt ability of this annuity well unfortunately you don't get to have that review congress writes laws you're supposed to follow the laws as written when there is no ambiguity of justice when and so far as to hold i'm going to construe the judge is going to construe for weight be the internal revenue code as allowing qualification of annuity if it meets an annuity purchased in one lump sum by a rollover there is nothing in the statute there is no subset or any qualification under for away b that allows this court to make that educational determination that in this specific instance he's going to determine that it's a qualified individual retirement annuity there's no basis for that in the language and then we go on to the bat threw it away so i don't care what it says this is what i'm going to do if you call that an absurd result well unfortunately sometimes congress doesn't act and sometimes their decisions can be absurd really a premium when you're when you're paying for the sense maybe for i mean i think congress is trying to protect ira funds from from being subject to being taken in bankruptcy right to a certain degree if they meet the qualifications so if you own stocks and bonds in your ira that is not subject to being you know used as an asset in in the bankruptcy right generally yes ok so why isn't this just a different investment vehicle rather than buying stocks and bonds i'm buying a annuity because the code doesn't allow for that if you take money out of your ira and undisputed in such a crucial hill that that money was severed from that individual retirement account so now it's in a limbo for up to sixty days for you to reinvest that money you don't are required to you could purchase a lake lot so under that analysis if you purchase a lake lot why isn't that lake lot exempt because it was originally example monies from an intern from a from an individual retirement account yes but if you buy a lake lot it's not rollover you're not it's not still part of the ira right correct you have to pay taxes on it and all that sort of thing yes but your honor i think in order for to be a rollover the first has to be an individual retirement annuity that qualifies to receive the roll over funds if we look at section four we d three of the code it says you know that it's not you know it doesn't apply for funds paid out the entire amount is paid into it doesn't say into an individual retirement annuity the first criteria that this court must address which neither the bankruptcy corner the  is doesn't meet the requirements of individual retirement annuity and in this case it doesn't because of the issues that we've said and the language for the rollover under three to zero under four a wait d says it has to be  something into something unless it's already established it doesn't say that you get to roll the money over to create a new vehicle whether it's a qualified individual retirement annuity or a qualified individual retirement account it doesn't say to us to create it or is established this has to be paid into i think the purpose of the statue's if you had two or three different ira accounts sitting up there and you wanted to combine them you could roll them in the one with only one task consequences that didn't happen here there was no individual retirement annuity created prior for this roll over to occur if we just assume that it's going to be rolled over that we're putting the cart before the horse we're just saying because it was exempt here it is automatically an as well because it was exempt a one point doesn't really make any difference if the individual retirement annuity itself qualifies and i don't think that's what the statute says i think the statute is very clear as to what is required to have  qualified individual retirement annuity contribution in this case again the excess contribution two hundred sixty seven thousand dollars the georgia bankruptcy court again held that that did not qualify as an individual retirement annuity and i think it's important to note here that the debtor made the argument that there was no qualifying requirements under section four weight of the internal revenue code if it's a horse it's a horse in this instance your honor it was a sphinx single fixed premium now if we go back and we look at the flexible issues that were talked about through the amicus and also through the through the response of brief this what do you what do you make of the fact that it uses the plural the premiums are not fixed does that maybe perhaps suggest that a single premium could be fixed your honor i think there's two points there it says the premiums are not fixed and then right below it says the annual premium ok i believe the intent of this was you know we're not going to fix a premium so if your wages go up or down you're not required to put in x amount of money and some of the legislative history and some of the reports are recent and other things show that but it shows that there's flexibility this case pro annuity prohibits you you could not make another contribution or any premium here after that clearly isn't the intent of for a way be were references the annual premium that is intended this type of an account is in attendance so you can put money into it on an annual basis is a required that questions unknown but by prohibiting it like it is in this a new eighty you don't even have that option and that is what takes us so far askew from being qualified as an individual retirement annuity in this matter the cases also  also some cases in real louis and in many of those cases most rollover money now those cases involve money that originally came from an ira and the reason i say it that way your honor is that i only think you can roll it over if you roll it over into a qualified individual retirement annuity prior to that you're rolling it over but you don't get to have the tax benefit have nina rolled over because it's not a qualify the new body in which you can roll it and the only one i think correct me if i'm wrong the only one that involved disregarded it so i don't believe that is binding upon the fact that it is a roll over my but you are correct that is the only case that has to actually deal with someone some point were qualified in some other fashion if there's no further question then i reserve the rest of my time for rebuttal ok thank you and traced where we came to this point and one of the things that occurred to me is that when these issues were first brought to my attention by mr de in the trustee i looked at and said this is really a simple issue premiums aren't fixed it was just a one time payment if you're going to buy an annuity and it's going to have a set amount being paid out it has to be a set number you can't contract with an insurance company if it's not congress knows that people over there we presume pretty intelligent know these things and so when i looked at all this i couldn't see the issue as i got more and more involved in the case and working through it you know i understand the trustees argument so i got more involved in the beginning and you shouldn't minutia and i will address that in a moment but when i reflected this is really a simple case this is not a fix premium it's just the amount that the debtor chose to pay in to buy this annuity and therefore the trustees arguments all fall fail being traced from that the debtor mr miller my client was sixty three years old at the time that this transaction occurred in two thousand and nine he had a qualified irony that as best as we can tell came from ordinary and proper contributions over the years at that time as judge to szell cited in his decision the market was pretty volatile areas were going up and down anyone who had a retirement fund anyone who had anything knew that they were dropping and as judge kitchell commented in his decision it made prudent sense at that time when you're looking at retirement and facing retirement to put money into a new  there was no it went to the debtors for sixty days to decide the paperwork in this case all stipulated to in the record shows that the money went direct from the ira to the insurance company to buy the annuity never passed from a similar hand no question though about that direct i would say in bankruptcy it appears to be unique factual circumstance because i did another update last night before course today's hearing to see if there'd been any cases decided and basically the only cases involving a rollover was the case that was discussed in appellant's argument the leclerc piece the other than the keep this case coming up in citation there's no cases dealing with a rollover and i and and i think it's unique in the bankruptcy context because and this is not the record but my experience representing debtors is that usually spend down their iras to stave off bankruptcy so we usually don't have cases involving these numbers that make it worthwhile pursuing i think also what's going on with the appellate record here is something that i learned early in my practice i was told by my boss to go research an issue and i was embarrassed because i came back and i had no case of thor and couldn't find anything and he just laughed and he said sometimes the most simple questions have no authority but you can't find a case that if you drop a rock it falls down or that the sky is blue and i think that's what we have here i think and that's why i started out saying taking a step back is extremely helpful here because when we take a step back and look at this it of course doesn't fit the statute it wasn't contemplated it doesn't fit i think judge counters question earlier about the plural of the premiums gets into what i'm going to comment on in a minute my argument but i to the responded judge murphy's question i don't think this is unique case outside of bankruptcy as the amakosa brief points out and as the i r s regulations cited in all here so i think in bankruptcy it's unique but i suspect just from a planning standpoint it's not unique at all it's just never been challenged and for a number of good reasons for one the i r s appears to be promulgating regulations authorized so let's get into a little bit of the argument in the new ship and we go back through the congressional intent here and if one looks at this type of arrangement it seems pretty clear reading the history looking at the i r s regulations looking at the context and taking a step back that this language is to address a specific problem and the problem both congress was looking at and the way that this should be interpreted in the context and the problem the i r s wants to address is that not everybody contributes to these an contributed to normal ira contributions those ira contributions are subject to statutory limits those are cited in the briefs what they wanted to set up a situation where a taxpayer did not contract you know couldn't do  these if the taxpayer was contractually obligated to meet future premium payments that possibly could exceed the contributions that's what the i r s says that's what the history appears to indicate and all of that asked to do with contributions from not qualified monies going in on to the employment and contribution limits here it's a roll the cases all cited by the trustee where these rollovers are not allowed or not restart were at the top where it's a nonexempt case are all not real and there is one thread that seems to go through all those cases that isn't common that really doesn't apply here and that thread appears to be a debt or converting nonexempt assets to exempt assets shortly before filing bankruptcy or within a reasonable time and trying to shield it under the shield of fitting in this category and the courts have not allowed that here this isn't one of those cases if my client had left everything and we've all stipulate to this and my point of never bought the in who would be in two thousand and nine we wouldn't be  here if you put it in any other type of vehicle example used by just going or if you bought a lake cabin with it we wouldn't be here he put it in this vehicle based on relying upon i r s regularly proposed regulations representations you can see in the documents that are part of the record from the insurance company and everybody that this is the way you're supposed to do it as a good solid investment it simply doesn't fit the language of the stature of the intent the trustee argues plain language but the language isn't so plain i mean when you look at it is this a premium i don't think so it's just what the annuity cost if two weeks later he wanted to buy another annuity he could go in and buy another an he would have to make the contribution limitations but that would make no sense when he's already sixty three when he did this he's sixty eight now when he's in retirement because all of this c s to take out one certain period of time anyway so your argument is that for deals with a situation where somebody is on an ongoing basis using their yearly exam tomorrow to buy an annuity that is absolutely hundred percent correct so what should we be looking at this situation under the i would assume you're going to say that the provisions that determine whether it is a qualified role well that's part of it yes and the other part is just that this language doesn't apply because the premiums are not fixed he bought an annuity purchase that we can argue that that's a premium but it really isn't it's the purchase price of the you know what the debtor didn't have a fixed amount he had to put in here there was no contract to obligation when he negotiated this or work this out to buy it like contemplated by congress here and the i r s regulations and the other items that are cited in the briefs it wasn't a scenario where he agreed he'd have to pay in a certain amount at fixed intervals or a fixed amount to get what he was going to get it was simply how much do i if i take this money and put it in how much am i going to get back it had to be a set dollar amount mathematically to calculate that number and that's what he did he could put in he was free to put in whatever he wanted and he did he put in the whole model desirea and put it all in there and so you know i just don't think it fits in there and of course if a statute isn't you know and we cite the supreme court decision this court is very well aware of all of the authority if a statute has an ambiguity or a statute is unclear or it doesn't seem to apply if it results in an absolutely absurd amount you know the court's everybody has to interpret it in a way that makes sense under the statutory scheme here to interpret these individual retirement annuities as no longer being tax qualified under these fact of these investments over the last whatever number of years since the statute was an act not only taxes but potentially penalty and other ramifications and i assume the i r s hasn't come after him for taxes or anything you kno no they haven't fact their regulations as cited in the amakosa brief their regular proposed treasury regulation specifically authorized this type of transaction when one takes a look through it so i don't think there's a chance of them coming after anybody for this so just to finish up because i'm at the end here the trustees in our argument ignores a number of items that are extremely relevant and extremely important the case last night about the trustee all deals with cases they're not rollovers this is a rollover situation it ignores the context of the statute to limit the contribution to the employment limits when it's a non role it ignores the i r s regs the i r s regulations and ignores the public policy behind all this and the current way everything is set up and most importantly to get back to what i said when i started it just doesn't feel right it ignores common sense and the application of the law is in the application of statute it's using obscure definition of a statutory subdivision taken out of context to invalidate a qualified tax vehicle used prominently throughout the country that's apparently dors r s that would have terrible ramifications throughout the country not to mention the room for occasions to my client and so for those reasons i think both the trial judge judge kitchell and the bankruptcy appellate panels isn't on roll over situation and that what we really should be looking at is whether this is a qualified role i mean otherwise isn't he right that everyone who did this would have to pay taxes on it as if they had bought a lakefront property i don't know the answer that  not the issue of whether or not three thousand people or thirty thousand people have used this type of vehicle to do it probably a lot of people have bought a new ease with their ira funds well if that's the case and then there have been that congress needs to change from what it says in order to have an individual retirement into what the statute is clear and i am going back again the statute pretty clearly deal with a non rollover situation where you're using your current income and using your exempt amounts to to buy an annuity on an ongoing basis it certainly could be construed to be that way but then the question is how can you claim it as an example of the bankruptcy code if it doesn't fit into that criteria willing to roll over for  but the rollover provisional body has pointed to the rollover provisions for a weight deemed specifically say it has to be paid into again you can't create a new vehicle by doing this process it has to be not created this be paid into an individual retirement annuity that doesn't mean as exempt if you look at the boat history miscasts and they immediately because of a single payment again none non all use the word roll over not previously qualified monies because in order for to be a rollover you have to roll it over into a qualified provision it's money sitting out there that he had a choice of what to do he could roll it into a qualified ira or a qualified individual retirement annuity you could take the money and go there i mean the term rollover is again as i think is putting the cart before the horse the question is are the issue is under the boat case there are any of these out there under section seventy two of the internal revenue code this is a single pay a premium is paid up it doesn't fit the statutory requirement for a weight b and as a result if it's a new t under seventy two which allows for some tax benefits that doesn't mean you're allowed to exempt it under the under the bankruptcy code which references doesn't reference seventy two and we put this in our brief specifically a page thirty three of our brief that doesn't mean that you don't have some tax benefits and you can roll over into that point the point here is in order for it to be claimed as exempt it has to fit under four a wait b and it doesn't the other the other issues as far as you know with respect to the regulations the regulations that were cited by the mucus and a to treat it as an expression of the agency's interpretation of the statute i don't believe there is any published regulation out there there's guidelines there's the i r s manual the tax court has a couple cases or says we don't care what the manual says we have to look at the law says there can be our interpretation but there is no regulation it has actually been adapted it was proposed it was not adopted i think that's a key distinguishing factor again in summary this does not qualify under for a way  in the bankruptcy court thank you