* Pursuant to Local Rule 47.5, the court has determined

that this opinion should not be published and is not precedent

except under the limited circumstances set forth in Local Rule

47.5.4.

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_____________________

No. 95-30700

Summary Calendar

_____________________

 IN THE MATTER OF: WILLIAM DENIS BROWN,III,

 Debtor.

 __________________________________________

HIBERNIA NATIONAL BANK,

Appellant,

v.

WILLIAM DENIS BROWN, III,

Appellee.

_________________________________________________________________

Appeal from the United States District Court

for the Western District of Louisiana

(95-CV-357)

_________________________________________________________________

January 19, 1996

Before KING, SMITH, and BENAVIDES, Circuit Judges.

PER CURIAM:*

Hibernia National Bank ("Hibernia") appeals the district

court's affirmance of the bankruptcy court's grant of summary

judgment in favor of debtor William Denis Brown, III ("Brown"). 
 

2 Hibernia is the successor of First Commercial Bank and

assignee of its claim in the Brown bankruptcy. 

2

Hibernia had objected to Brown's claimed exemption of his

interest in a pension plan. The summary judgment dismissed

Hibernia's objection on the grounds that, where the Internal

Revenue Service (the "IRS") had determined that the pension plan

was "qualified under the Internal Revenue Code" as required by

Louisiana law, the bankruptcy court was precluded from contesting

that determination under In re Youngblood, 29 F.3d 225 (5th Cir.

1994). We affirm.

I. BACKGROUND

Brown created the Brownland Corporation Defined Benefit

Pension Plan (the "Pension Plan") in October 1980. The IRS

issued determination letters in 1984 and 1993 indicating that the

Pension Plan was qualified under the Internal Revenue Code (the

"I.R.C."). Brown filed for Chapter 7 bankruptcy on September 21,

1993 in the United States Bankruptcy Court for the Western

District of Louisiana. Pursuant to § 522 of the Bankruptcy Code,

in his original and subsequently amended bankruptcy schedules,

Brown claimed his interest in the Pension Plan as exempt property

under Louisiana law, La. Rev. Stat. 13:3881D. 

On January 21, 1994, Hibernia, a creditor and party-ininterest,2 filed an objection to the exemption. Hibernia alleged

that Brown's interest in the Pension Plan could not be claimed as
 

3 Three months earlier, in Youngblood, we held that,

under the Texas exemption statute, a bankruptcy court was

required to defer to the IRS's determination that a pension plan

was tax-qualified. In re Youngblood, 29 F.3d 225, 229 (5th Cir.

1994).

 

4 Because the bankruptcy court originally did not enter a

formal order memorializing its ruling of March 2, 1995, Brown

construed the January 5, 1995 order as interlocutory. When

Hibernia subsequently filed a Notice of Appeal, Brown charged

that Hibernia had not complied with the requirements for appeal

set forth in Rule 5 of the Federal Rules of Appellate Procedure. 

Accordingly, Brown filed a motion to dismiss this appeal for lack

of jurisdiction. On September 8, 1995, however, the bankruptcy

court entered an order memorializing its March 2, 1995 ruling and

unequivocally dismissing Hibernia's objection to the exemption of

3

an exemption under Louisiana law because the Pension Plan was not

tax-qualified under the I.R.C. On November 18, 1994, the

bankruptcy court ruled that our decision in Youngblood required

it to give deference to the IRS's treatment of the Pension Plan.3

Therefore, with the proviso that Hibernia retained the right to

request an IRS audit of the Pension Plan, the bankruptcy court

granted Brown's request for summary judgment and dismissed

Hibernia's objection to the exemption of Brown's interest in the

Pension Plan. On January 5, 1995, the bankruptcy court issued an

amended order that reiterated its November 18, 1994 ruling,

adding that, unless the IRS indicated to the bankruptcy trustee

its intention to audit the Pension Plan before February 7, 1995,

final judgment would be entered dismissing Hibernia's objection. 

After a hearing on Hibernia's motion to extend the deadline, the

reference to the February 7, 1995 deadline was deleted by oral

ruling of the bankruptcy court on March 2, 1995.4 On April 20,
Brown's interest in the Pension Plan. Brown has since

acknowledged that any jurisdictional defects to this appeal have

been cured.

 

5 On July 28, 1995, the IRS notified Brown of the results

of its audit: The returns submitted for 1992 and 1993 were

accepted by the IRS; no additional taxes were assessed; and

previous determinations that the Pension Plan was tax-qualified

were not revoked.

4

1995, the IRS notified Brown that it intended to audit the

Pension Plan for the years 1992 and 1993.5 

In a memorandum ruling dated June 22, 1995, the United

States District Court for the Western District of Louisiana

affirmed the bankruptcy court's ruling and adopted the reasons

assigned by the bankruptcy judge. The district court declined to

distinguish this case from Youngblood on the basis of whether or

not the IRS performed an audit. Noting that "[t]he IRS has

always treated this Pension Plan as tax qualified," the district

court found no reason to reverse the bankruptcy court's ruling. 

This appeal followed.

II. ANALYSIS

We review de novo the district court's affirmance of the

bankruptcy court's legal conclusion that the bankruptcy court was

bound by the IRS's determination. In re Southmark, Corp., 49

F.3d 1111, 1114 (5th Cir. 1995); In re Brocato, 30 F.3d 641, 642

(5th Cir. 1994). Although we benefit from the district court's

consideration of the matter, the amount of persuasive power to be
 

6 Under the heading "General exemptions from seizure,"

the Louisiana Revised Statutes provide:

The following shall be exempt from all liability

for any debt except alimony and child support: all

pensions, all proceeds of and all payments under

annuity policies or plans, all individual retirement

accounts, all Keogh plans, all simplified employee

pension plans, and all other plans qualified under

sections 401 or 408 of the Internal Revenue Code. 

However, an individual retirement account, Keogh plan,

simplified employee pension plan, or other qualified

plan is only exempt to the extent that contributions

thereto were exempt from federal income taxation at the

time of the contribution, plus interest or dividends

that have accrued thereon.

La. Rev. Stat. 13:3881D(1). La. Rev. Stat. 20:33 contains

language identical to La. Rev. Stat. 13:3881D(1).

 

7 The Bankruptcy Code provides in pertinent part:

(d) The following property may be exempted under 

subsection (b)(1) of this section:

. . . .

(10) The debtor's right to receive--

5

assigned to the district court's conclusion is a matter of

appellate discretion. In re Briscoe Enters., Ltd., II, 994 F.2d

1160, 1163 (5th Cir.), cert. denied, 114 S. Ct. 550 (1993).

Once an action in bankruptcy is commenced, all property in

which the debtor has a legal or equitable interest becomes the

property of the bankruptcy estate. 11 U.S.C. § 541. However, a

debtor may claim as exempt any property that is exempt under

federal, state, or local law. 11 U.S.C. § 522(b). In this case,

Brown claimed an exemption for his individual interest in the

Pension Plan under La. Rev. Stats. 13:3881D and 20:33.6 These

statutes and the corresponding provision in the Bankruptcy Code,7
 . . . .

 (E) a payment under a stock bonus, pension, 

profitsharing, annuity, or similar plan . . . 

to the extent reasonably necessary for the 

 support of the debtor and any dependent of

the debtor, unless--

. . . .

(iii) such plan or contract does not 

 qualify under section 401(a), 403(a), 

 403(b), or 408 of the Internal Revenue 

Code of 1986.

11 U.S.C. § 522(d)(10)(E)(iii).

6

require pension plans to be qualified under the I.R.C. in order

to be exempt from seizure. 

The bankruptcy court and the district court concluded that

Brown's Pension Plan was tax-qualified, based on their respective

readings of Youngblood. In that case, the Youngbloods sought to

exclude from their Chapter 7 bankruptcy estate the interest that

they held in an individual retirement account ("IRA"). The IRA

had accepted a rollover contribution from a defined-benefit

employee pension plan created by Mr. Youngblood in connection

with his construction company. A creditor objected to the

claimed exemption on the grounds that the pension plan was not

qualified under the I.R.C. as required under Texas law. The

bankruptcy court held that the Youngblood's pension plan was not

tax-qualified despite two IRS determination letters and an IRS

audit to the contrary. The district court affirmed the judgment

of the bankruptcy court. We concluded that, regarding the

pension plan's tax qualification, the bankruptcy and district
 

8 The bankruptcy court explained:

[I]n review of how the [Louisiana] state statutes want

this issue determined they clearly show, and Youngblood

clearly states, they don't want me to do it. They do

not want the state courts to do it. They, instead,

want the IRS to do it because the IRS is that entity

which determines whether or not the plans are

qualified. It [en]forces its own regulations . . . and

it does so in a timely fashion and it does so in a

uniform fashion.

7

courts erred in not deferring to the determination of the IRS. 

Youngblood, 29 F.3d at 229. 

Prior to Youngblood, in In re Goff, 706 F.2d 574 (5th Cir.

1983), abrogated on other grounds by Patterson v. Shumate, 504

U.S. 753 (1992), we suggested that courts must defer to the IRS

as to the qualification of self-employed Keogh plans under the

Employment Retirement Security Act of 1974 ("ERISA"):

Although an argument might have been made that the

debtors' plan was not qualified, . . . we must accept

for purposes of this appeal that the plan was qualified

and thus subject to ERISA anti-alienation provisions. 

Congress has committed the determination of

qualification, in the first instance, to the

Commissioner of Internal Revenue, and it would

therefore be inappropriate for us to pass upon this

question. 

Goff, 706 F.2d at 580 n.16.

In the instant case, based on Youngblood and Goff, the

bankruptcy court determined that it must defer to the IRS's

treatment of the Pension Plan as qualified.8 The IRS treated

Brown's Pension Plan as tax-qualified for more than ten years

and, consistent with the facts in Youngblood, the IRS issued
 

9 Additionally, after auditing the Pension Plan for the

years 1992 and 1993, the IRS let stand all previous

determinations that the Pension Plan was tax-qualified.

 

10 The Louisiana code exempts pensions, "simplified

employee pension plans, and all other plans qualified under

sections 401 or 408 of the Internal Revenue Code," from liability

for any debt. La. Rev. Stat. 13:3881D(1) (emphasis added); La.

Rev. Stat. 20:33. The Texas Property Code exempts pensions,

simplified employee pension plans, and other plans "unless the

plan . . . does not qualify under the applicable provisions of

the Internal Revenue Code of 1986." Tex. Prop. Code Ann. §

8

determination letters indicating that the Pension Plan was taxqualified.9 Therefore, the bankruptcy court ruled that Brown's

interest in the Pension Plan was exempt from the bankruptcy

estate. The district court adopted the bankruptcy court's

rationale and affirmed its ruling. 

Hibernia advances three arguments on appeal: (1) that

Youngblood is not controlling with respect to Louisiana law; (2)

that Youngblood is relevant only where the IRS has performed a

comprehensive audit; and (3) that Youngblood should be overruled

because it undermines the statutory duties of the bankruptcy

court. We address these arguments seriatim.

First, Hibernia proposes that Youngblood is not controlling

with respect to Louisiana law. Hibernia contends that it was

error for the district court to affirm the bankruptcy court's

conclusion that Youngblood applies not only to the Texas

exemption statute but to La. Rev. Stats. 13:3881D(1) and 20:33 as

well. Despite the language of the relevant Louisiana and Texas

statutes--language equivalent on its face,10 Hibernia attempts to
42.0021(a) (emphasis added).

 

11 The minutes of the June 13, 1983 meeting of the

Louisiana House Committee on Civil Law and Procedure contain the

following entry:

Representative Fernandez stated that IRA's and Keogh

accounts have limitations on the tax benefits, but

there are no limitations on the amount of money that

can go into the account if you are willing to take the

tax consequences. Representative Fernandez expressed

concerns that this situation could be abused; money

could be hidden from seizure.

House Comm. on Civil Law and Procedure, 6-13-83, SB No. 324. 

9

distinguish the Louisiana exemption statutes from Texas law on

the basis of legislative intent. As evidence that Youngblood is

inapplicable in Louisiana, Hibernia offers the concern voiced by

Representative Manuel Fernandez that a debtor might abuse the

exemption process.11 Hibernia proposes that, notwithstanding the

expertise of the IRS and the Texas legislature's deference to

that expertise, the Louisiana legislature meant to wrest the

interpretation of federal tax law from the IRS in the belief that

exemption abuse can be discerned more readily by a state court or

a bankruptcy court applying state law. 

The argument that Louisiana's lawmakers believed that, in

the interest of limiting debtor abuse, it was necessary to

displace the IRS with bankruptcy courts is unconvincing. 

Explicit anti-fraud provisions were included by the Legislature
 

12 In accord with 11 U.S.C. § 727(a)(2), each of

Louisiana's exemption statutes stipulates: "No contribution

shall be exempt if made less than one calendar year from the date

of filing for bankruptcy, whether voluntary or involuntary, or

less than one calendar year from the date writs of seizure are

filed against such account or plan." La Rev. Stat. 13:3881D(2)

(emphasis added); La. Rev. Stat. 20:33.

 

13 The minutes of the June 13, 1983 meeting of the

Louisiana House Committee on Civil Law and Procedure contain the

following response to Representative Fernandez's concern about

the possibility of debtor abuse:

Mr. Edward Glusman representing the Louisiana State Bar

Association . . . stated that Representative

Fernandez's problem is taken care of on page 1, line 32

of the bill [that to be exempt plans must be "qualified

under sections 401 or 408 of the Internal Revenue

Code"]. Representative Fernandez agreed.

House Comm. on Civil Law and Procedure, 6-13-83, SB No. 324.

10

in the exemption statutes themselves.12 Moreover, shortly after

expressing his concern about debtor abuse, Representative

Fernandez acknowledged that this concern was adequately addressed

by the statutes' tax-qualification requirement;13 and, as we

stated, in Youngblood:

[T]he legislature had to know that, in applying [the

exemption statute], its own courts would be required to

look to federal tax law to determine whether a plan was

qualified under the Internal Revenue Code. The IRS,

which has been entrusted with the task of implementing

the Internal Revenue Code, has adopted extensive rules

and regulations governing income tax in general, and

the taxability of pension plans in particular. The IRS

also has a wealth of experience in the practical

application of tax laws.

Youngblood, 29 F.3d at 228. We are not convinced on the basis of

the legislative history offered by Hibernia that the Louisiana

legislature intended for bankruptcy courts to construe federal
 

14 Hibernia contends that bankruptcy courts are capable of

interpreting federal tax law. The issue, however, is whether the

Louisiana legislature intended for a bankruptcy court's

interpretation of federal tax law to preempt a contrary

interpretation of federal tax law advanced by the IRS. Pension

plan qualification under federal tax law is an esoteric and

complex area. The "IRS has established programs . . . designed

to correct past defects, to ensure that plans are properly

operated in the future, and to impose sanctions less severe than

outright disqualification." Youngblood, 29 F.3d at 228-29 n.4

(quoting Federal Tax Coordinator 2d ¶ T-10590 (1994)). 

Particularly because the IRS can make fine distinctions--the IRS

might impose no more than a monetary penalty or may excuse

entirely an I.R.C. indiscretion that a bankruptcy court might

interpret as a disqualifying event, we find it unreasonable to

believe that the legislature intended to adopt a scheme that

supplants the informed judgment of the IRS with court-construed

disqualification. 

11

tax law in opposition to an IRS determination.14 Whether or not

the Louisiana legislature was arguably more preoccupied with

debtor abuse than was the Texas legislature is not dispositive. 

Second, Hibernia contends that Youngblood is relevant only

where the IRS has performed a comprehensive audit. In

Youngblood, after auditing the pension plan, the IRS did not

revoke its earlier determination that the plan was tax-qualified. 

Similarly, in the instant case, the IRS ultimately audited

Brown's Pension Plan and let stand its earlier determination that

the plan was tax-qualified. However, because the IRS did not

conduct its audit prior to the filing of Brown's bankruptcy

petition, Hibernia attempts to distinguish this case from

Youngblood. The Supreme Court has pointed out that "exempt

property is determined 'on the date of the filing of the

petition.'" Owen v. Owen, 500 U.S. 305, 314 n.6 (1991) (quoting
 

15 In Peterson, the court stated:

The date of petition is seen as the critical date for

several other determinations in a bankruptcy case. For

example, it is on that date when the debtor's rights in

exempt property are defined, despite a later change in

circumstances.

Peterson, 106 B.R. at 230.

12

11 U.S.C. § 522(b)(2)(A)). Hibernia cites Owen and several other

cases, including In re Peterson, 106 B.R. 229 (Bankr. D. Mont.

1989), overruled by In re Doss, Nos. 91-41578-007, 91-31042-007,

1991 WL 700518 (Bankr. D. Mont. 1991),15 to support its

contention that, notwithstanding the IRS determination letters to

the contrary, the Pension Plan was not tax-qualified for purposes

of exemption from Brown's bankruptcy estate. We find this

argument unavailing. 

The Pension Plan itself was not altered by the 1994 IRS

audit. It did not suddenly acquire tax-qualified status

coincident with the audit. Nor did Brown's circumstances

relative to the plan's qualification change as a result of the

IRS audit. Rather, it is self-evident that on the date in 1993

when Brown filed his bankruptcy petition the Pension Plan was

already tax-qualified because the IRS had so treated the plan for

the better part of 13 years and, thereafter, when it eventually

audited the plan for the years 1992 and 1993, the IRS did not

revoke its prior determinations. 
 

16 28 U.S.C. § 157(b) provides in pertinent part:

(b)(1) Bankruptcy judges may hear and determine all

cases under title 11 and all core proceedings under

title 11 . . .

 (2) Core proceedings include . . .

 . . .

 (B) allowance or disallowance of claims against

the estate or exemptions from property of the estate,

and . . .

28 U.S.C. § 157(b).

13

Furthermore, the determinative issue in Youngblood was

whether the IRS had made a determination regarding the

qualification of the Youngblood's pension trust, not whether the

IRS had conducted a comprehensive audit. We are not prepared to

restrict the ruling in Youngblood to that limited category of

pension plans that have been audited by the IRS. In Youngblood,

we stated that "[w]e do not believe that the legislature wanted

to adopt a scheme that invites frequent, unseemly, conflicting

decisions between the state court or bankruptcy court, and the

IRS, such as occurred in this case." Youngblood, 29 F.2d at 229. 

Where the IRS has not audited a pension plan but has determined

that the plan is tax-qualified and has treated it as such, the

likelihood of conflicting decisions is no less substantial and no

less troublesome. 

Finally, Hibernia argues that Youngblood should be overruled

because it undermines the statutory duties of the bankruptcy

court. Citing 28 U.S.C. § 157,16 as well as § 505 of the
 

17 Under the title "Determination of tax liability," the

Bankruptcy Code provides in relevant part:

(a)(1) Except as provided in paragraph (2) of this

subsection, the court may determine the amount or

legality of any tax, any fine or penalty relating to a

tax, or any addition to tax, whether or not previously

assessed, whether or not paid, and whether or not

contested before and adjudicated by a judicial or

administrative tribunal of competent jurisdiction.

 (2) The court may not so determine--

 (A) the amount or legality of a tax, fine, 

 penalty, or addition to tax if such amount or 

 legality was contested before and adjudicated 

 by a judicial or administrative tribunal of 

 competent jurisdiction before the commencement 

 of the case under this title; or . . . 

11 U.S.C. § 505(a).

 

18 The Louisiana legislature has provided that only

"property and income which is exempt under the laws of the state

of Louisiana and under federal laws other than Subsection (d) of

Section 522 of [] Title 11 of the United States Code," shall be

exempt from the property of a bankruptcy estate. La. Rev. Stat.

13:3881B(1).

14

Bankruptcy Code,17 inter alia, Hibernia contends that Youngblood

improperly limits bankruptcy courts' specific grant of

jurisdiction regarding exemption issues. We disagree. 

As permitted under the Bankruptcy Code, Louisiana has chosen

to "opt out" of the opportunity to allow its debtors to use the

"laundry list" of exemptions enumerated under subsection (d) of

11 U.S.C. § 522.18 Instead, Louisiana has created its own

exemption scheme, pursuant to authority recognized by the

Bankruptcy Code. 11 U.S.C. § 522(b). What is at issue in this
15

case is the interpretation of those Louisiana statutes setting

forth Louisiana's chosen exemption scheme. The authority of the

bankruptcy court to adjudicate tax liability, for example, is of

little consequence to the construction of these state statutes,

particularly--as in this case--where the IRS has not asserted a

claim against the Pension Plan for additional taxes. We do not

find the ability of a bankruptcy court to fulfill its statutory

duties diminished in any meaningful way by deference to the IRS

on matters of tax qualification under a state statute.

Consistent with the reasoning in Youngblood, we conclude

that, for purposes of exempting Brown's interest in the

bankruptcy estate, the Pension Plan was tax-qualified. The Texas

and Louisiana legislatures employed comparable language in

drafting their respective exemption statutes, and, as we

explained, with regard to Texas law, in Youngblood:

We are persuaded that the legislature intended for its

own courts (or bankruptcy courts applying Texas law) to

defer to the IRS in determining whether a retirement

plan is "qualified" under the Internal Revenue Code. 

We see no reason that the legislature would want its

courts, which are inexperienced in federal tax matters,

to second-guess the IRS in such a complex, specialized

area. We find it much more reasonable to assume that

the legislature contemplated creating an exemption from

seizure for a debtor's retirement funds that could be

simply and readily determined by referring to the

federal tax treatment of those funds. 

Youngblood, 29 F.3d at 229. We are not convinced that the

lawmakers of Louisiana were any less interested than those of

Texas in providing an exemption that may be applied simply and
16

readily. The bankruptcy court properly deferred to the IRS's

determination that Brown's Pension Plan was tax-qualified. 

Therefore, it was not error for the bankruptcy court to dismiss

Hibernia's objection to Brown's claimed exemption of the plan

from the bankruptcy estate. The district court properly affirmed

this dismissal.

III. CONCLUSION

For the reasons stated above, we AFFIRM the judgment of the

district court.