H on. Am y J
. St
. Ev e, D is tr ic t Jud ge f or the N orther n D is tr ic t  ofI l l i noi s , s i t t i ng by des i gna t i on.



## In the 

# U n ited S ta tes Co urt o f Ap p ea ls

F o rth eS e v e n th C ir cu it
N o. 09

- 3478 I N RE : A NDR EA H. M EYERS, D e b t or -Appe l l ant
.

A pp eal from the United S t ates Di strictC our t fo r the S outhernDi stricto f Illino is. No . 09- cv-0323- MJ R

—Mi ch ael J . Reagan, Judge .
A RG UE D F EB RU AR Y 26, 2010

— D ECI DE D A UGUS T 2, 2010

Befo re F L A U M an d W OO D , C ircu it Judges , a n d S T . E VE , D istrict Judge.  W OO D , Cir cu i tJudg e . Thi s ca se i nv o l ve s a r ec ur r i ng q u es tio n u n d er th e b an kr u p tc y la w s: w h at be lon gs in the bankr up tcy est ate ? I n gener al, ass ets that w er e acquir ed bef or e the ti m e when t he bank ruptcy peti ti on i s fi l ed

— so- cal l ed pre- peti ti on as set s

— ar e a vai l abl e t o sat isfy pr e- peti ti on debts
. Over gener al i zi ng, o ne can say th at p ost-p etition a s s e t s belong to th e d ebtor an d are not encum ber ed by any l i abi l i ti es that w er e d i schar ged2 N o. 09

- 3478 i n b a nk r up t c y . Bythe s a me t o k e n, a nyl i a b i l i t i e s i nc urr ed b y the debtor post- peti ti on m ay not be disc harg ed in the b ankr up tcy proce ed ing, norsho uld the bank ruptcy pr o ce ss c o m pelthe pr e- pet i ti o n c r edi tor s t o b ea r a ny burden as a r esul t o fthes e pos t- peti ti on o bl i gat i ons. All o ca tinga ss et s an d l i ab i l i ti es t o the c o r r ec t si de o fthe p re- and pos t-pe titi o n line is us ua ll y a straightforw ard tas k, but occa si onal l y the j ob beco m es chal l engi ng. DebtorA nd re a M eye rs ’ s ca se f al l s i n the lat te r cate gor y. The qu e s t i o n we mus t r e s o l v e i n he r a pp e a l i s ho w bes t to al l oca te post- peti ti on t ax r efund s w h en the debtor fi l ed her bank ruptcy peti ti on i n the m i dd l e o fthe tax yea r. The bank ruptcy cour t use d a m echani calsy ste m known as the “ pr o ra t a by days” m etho d to cal cul ate the pr opor ti on o fthe re fund s that be l onge d to the pr ep et itio n as se t p oo l. M ey er s filed h er p et itio n ap p ro x im ate l y 7 3 % o fthe wa y thr o ugh the t a x y e a r, a nd a c c o r di ngl y, u sin g that m etho d, 73% o fherta x re fund qual i fi ed as a pre - peti ti on a sset. I n tak i ng tha t a pp ro ach, the bankruptcy cour t f ol l owed a w el l

- tr od den path. M eye rs , how ever, tho ught that i t was the wrong path and too k a n a p p e a l t o t h e d i s t r i c t c o u r t
. T h a t c o u r t a ffi r me d t he ba nk r upt cyc o ur t, a nd no w M ey er s i s be f o r e th i s co urt see ki ng to per suade us that the es ta te r ecei ved to o m uch. W hi l e we r eco gni ze that the pr o rat a met hod m ay not be a pp ro pri ate f oral l cas es, we fi nd thatthe bankr u p t c y c o u r tp r o p e r l y a p p l i e d i th e r e , a n d s o w e a ffi r m.
I T h e f a c t s o f t h i s c a s e a r e u n d i s p u t e d
. Me y e r s f i l e d a pe t i t i o n f o r r e l i e fund e r Ch a pt e r 7o fthe Ba nk r up t c y Co deN o. 09

- 3478 3 on S eptem ber25 , 20 07. S ep tem ber25 was the 268th day of 2007, m eaning that approxi m ate l y 73. 42% ofth e y ear ha d pa ss ed bythe n. A t tha t po i nt, M ey er s’ s pays tu b i nd i cate s that s he had earned $37, 13 3.4 3 i n 200 7, with gr oss ta xabl e incom e o f$3 3, 855. 26. M eye rs ’ s t ota l20 07 i ncom e turned o u t to be $47, 256. 42 and tot al20 07 gr oss taxabl e i ncom e wa s $ 44, 136; the Se ptem ber25 fi gure s th er efo r e r epr es en t ab o ut7 8. 6% an d 7 6. 7% o fthe annual tot al s, res p ecti vel y. M eye rs ’ s federa l and sta te w i thhol ding tr acke d her i ncom e; herS ept em ber25 pay stub r eflects th atabo ut7 7% o fhe r t o ta l 2 00 7 wi thho l di ng a c c r u e d p r i o r to t h a td a t e . F o r e a s e o fr e f e r e n c e , we have prese nted thi s i nfo rm ati on about M eye rs’ s 2 007 i n c o me a n d wi t h h o l d i n gi n th e t a b l e b e l o w: M e y e r s ’ s 2 0 0 7I nc o me a nd W i t hho l di ng
C ate go ry 2007

T otals 2007Pre Peti t i on 2007Pre Peti t i on R atio Gross I n c o me $47, 256. 42 $37, 133. 43 78. 6% Gr o ss Ta xa b l e I n c o me $44, 136. 00 $33, 855. 26 76. 7% Feder al W i thho l di ng $5, 983. 00 $4, 634. 91 77. 5% S ta te W i th

ho l di ng $1, 727. 00 $1, 330. 00 77. 0%4 N o. 09

- 3478 The next i m port ant s tep f oro ur purp ose s o ccurr ed whe n Me y e r s fi l e d h e r 2 0 0 7fe d e r a l a n d s t a t e i n c o me ta x r etur ns . M ey er s’ s fede r alt ax r etur n r epo r te d tha t sh e o wed $ 2, 66 1 an d ha d wi thhe l d $ 5,98 3. On th atb as i s, s he requ ested a r e fu nd of $3,322. H er M issouri tax retu rn re port ed an o ver paym ent o f$2 16 f orwh i ch she al so r eque st ed a r efund. ( M ey er s wor k s i n Mis so uri, bu t sh e i s a r esi dent ofI l l i nois an d fi l ed her bank ruptcy peti ti on in I ll inois, w hi c h e x p lai ns w hy this case en d ed up here ra therthan the Ei ghth Ci rcui t. ) I n 200 8, m onths after f i l i ngh e r b a nk r up t c y p e t i t i o n, Mey e r s r e c e i v e d fe de r al and stat e t ax r efund s f or20 07 tot al i ng $3 , 538. T h is $ 3,5 38 is th e s u b j ec t o f M ey er s’s ap p ea l. In A ugust 2 008, Truste e Laura K
. Grandy ( the “Truste e”) fi l ed a m otion for tu rnov er of th e ban krup tcy estat e ’s share ofM eye rs ’ s 2 00 7 f edera l and sta te tax r efund s. S ee 11 U. S
. C
. § 5 42
. Co nc eptua l l y , the Tr us te e r eg ar ded th e am ou nt s w ithh eld in ex cess of th e tax es d u e as a form ofenf or ced s av i ngs; i fM eye rs ’ s withhol ding had been ex ac tl y e qua l t o t he ta xe s sh e o wed, a nd s he ha d putthe re m ai nd er i n a s avi ngs a ccount du ri ng the pre - peti ti on p er iod , i t w ou ld be p lain t h at th e a m ou n t s av ed w ou ld bel ong i n th e b an kr up tcy est ate
. Rel yi ng o n thi s theor y, the Tr ustee as ser ted thatthe ban kr u p tcy est ate was en ti tl ed to the pr e- pet i tion po r ti o n o fe ac h r efund, c al cul ate d ba se d o n the pr o rat a by d ays m eth od
. Si nc e M eyers fi l ed f orbank ruptcy 73. 42% of t h e w ay thro ugh the tax y ea r, thi s m etho d y i el ded $2 , 59 7. 60 a s th e p orti o n o fthe re fund s that be l on ged to the est ate
. The Bankr up tcy Code a l l o ws s ta te s to pa ss l aws c r ea tinge xem p ti o ns from the ba nk rup tcy est ate. 11 U
. S. C
. § 522(b)(2). I ll inois’sN o. 09

- 3478 5

ex empti o ns i nc l ude a “ wi l dca r d” f o r a ny pr o per tyup to $ 4 , 0 0 0
. 7 3 5 I L C S 5 / 1 2

- 1 0 0 1 ( b )
. At th e t i me o ft he Truste e’ s r equest , M eye rs had $1, 624 re m ai ni ng i n her “w i l dcard” exem pti on, and so the es tate’ s s hare had to be r e du c e d b y tha ta mou nt
. T he T r us t e e , the r ef or e, cl ai m ed $97 3. 60 ( $2, 597. 60 l ess $1 , 624) o fthe 2007ta x re fund s. M eye rs o bj ecte d to the Truste e’ s m oti on, ar gui ng tha t th e prop er m eth od f or calculating th e estate ’s share ( des cr ibe d i n fur th erde ta i l below ) woul d r es ul t i n the est ate ’ s cl ai m i ng o nl y $ 349. 91 afterthe w i l dcard w as ap p li ed
. Bot h th e ban krup tcy c o u r t and the d istri ct cou rt agreed w ith th e Tru stee, and ordered M eyer s t o turn o v e r the $ 9 7 3
. 6 0 tha tthe T r us t e e r e qu e s t e d.

II A Befo re anal yzi ng M eye rs ’ s s peci fi c si tuati on, we ste p backto di scuss w h y tax refund s pos e a part i cul arpro bl em . U nd erthe Bankru p tcy Code, a tr ustee i s a ssi gned to a dm i ni st erthe b an k r upt cye st at e; t o tha t en d, the proper ty ofthe est ate m ust be tur ned ove r to the t rustee. 11 U .S.C . § 54 2. P ro p er ty of th e b an k r u p t c y e st at e is define d to i ncl ud e “ al l l ega l and equi tabl e i nter est s o f th e deb to r i n pr o per tya s o fthe c o m m en cem en t o fthe c ase . ” Id
. § 541( a) ( 1)
. A s no ted ea rl i er, the ti m e o f the pet i ti on ( the “ com m encem ent o fthe case , ” id
. § 3 01( a) ) i s the ke y p oi nt f ori denti fyi ng the as set s o f the e sta te.6 N o. 09

- 3478 Courts have re cogni zed tha t t ax r efund s r ecei ved after the pet i ti on m ay, i n so m e ca ses , r epres ent pr e- p et ition ass ets and th us ar e par t o fthe bankr up tcy est ate
. S ee, e . g. , In reBar owsky, 94 6 F
. 2d 1516 , 1 51 8 ( 10th Cir
. 19 91) (c olle c tin g c as es ). Th e b ac kg ro u n d ru le u n d er th e o ld Bankru p tc y A ct, to wh i ch co urts st i l l r eferi n the er a o f the B an kruptcy Code, defi nes the bank ruptcy est ate to i ncl ud e pr oper ty that i s “ suf fi ci ently r oo ted i n the prebankr up tcy past a nd so l i ttl e e nt an gled w i th the bank

rupts’ abi l i ty to m ake an unencum ber ed f re sh st ar t. ” Segal v. R ochell e, 382 U
. S. 375, 380 (1966). See S. R EP . N O . 95- 989, at8 2 ( 19 78 ) ( no tingtha t, wi thr efer en ce to § 541 o fthe C od e, “[t]he resu lt of Seg a l v. R o ch elle .
. . i s fol lo wed, a nd the r i ght t o a r efund i s pro pertyo fthe e sta te” ) ( i nter nal citation om itted ). These g ener alr ule s prov ide the back gr ound fo r re sol vi ng di sputes o verta x re fund s, but th ey a re o nl y a sta rt i ng poi nt. The f act that reasonabl e peo ple can i denti fy c om peti ng m etho ds fo rc a l c ul a t ingthe p r e - pe t i ti on sh ar e o f th e re fu n d s b et ra ys th e in c om p let en e s s o f a ru le that si m plycal l s f ori dent ifying at w hat t i m e a n ass et b e c a me “ r o o t e d
. ” I n th i s c a s e , th e p a r ti es pr o ff e r t wo com peti ng cal cul ati ons. A s descr ibed abo ve, the Truste e ar gues that the b estm etho d fo r thi s ca se i s the pro rata b y d ays cal cul ati on. The Trust ee re cogni zes thatthis m etho d i s no t a pp ro pri ate i n al l cas es

— f orexam ple , f or debtors w hose i ncom e fl uctuates widel y fro m m onth t o m onth thro ughout the ye ar

—b utg i v e n the s t e a dy r ate w it h w h ich M ey er s’s inc om e, w ith h old in g, an d an tic ipated re fund s g re w , i t work s h er e. Bankruptcy cour ts o fte n h av e appr o ve d tur no ve r o r der s ba se d o n theN o. 09

- 3478 7 p r o ra t a b y d a y s m et h od for t h is t yp e o f d eb to r. See , e . g. , In re Tricke tt, 391 B
. R
. 657, 660 (B an kr. D. M ass. 2008); In re M a rvel , 372 B
. R
. 425, 433-34 (B an kr. N
. D
. I nd
. 2007). M eye rs urg es us to se lec t a di ff er ent m etho dol ogy, o ne a r ti cul at ed bythe U
. S. B an k r upt cyCo ur t f o r the W es te r n Di st r i cto fTe xa s i n In re D onnell, 35 7 B. R. 38 6 (B an kr . W .D . Tx . 200 6). D onnell b e g a n as thi s c a s e di d: th e deb to r fi l ed for ba nk r upt cymid- y ea r ; a t ax r efund f orthatye arwas i ssu ed post
- peti ti on; and the tr ustee re quested the pr o rat a b y da y s s ha r e . T he b a nk r up tcy cour t r ej ecte d thi s r equest. I t no ted thatthe pro rata me t h o d a s s u me d th a t“ th e d e b t o r h a d a s t e a d y i n c o me d u r i n gth e t a x y e a r , h a d r e g u l a r w i th h o l d i n go fi n c o me ta x es th ro u gh ou t t h e t ax ye ar , an d h ad an int er es t in an y r efundabl e ta x c r edi ts tha t g r ew r egul ar l y o ve r the ta x ye ar . ” Id. at39 6. T h e D on n ells d id n ot
. Id. at39 6- 97. The r efo r e, the c o ur t co nc l ude d tha t i t ha d t o “ exam i ne each ofthe com ponents o fthe t ax r efund t o de te r m i ne whe t he r, o n t he p e t i t i o n da te, the de b t o r p o s s e s s e d a l ega l o r equi tabl e i nt er est i n that com ponent. ” Id. at39 7 (em p ha sis i n origi na l)
. M ost im p ortan tly f or M eyers’s ca se , the c o ur t i n D onnell hel d that the bank ruptcy est ate was enti tl ed to the debto r’ s t ax r efund o nl y t o th e ext en t th atthe pr e- pet i ti o n wi thho l di nga m o unt ex c ee d ed th e t ax liab ility for t h e e n tir e y ea r. Id. at 398- 400. I t i s thi s f or m ula that M eye rs as ks us to applyto hercas e. W e n o t e f o r c o mpl e t e ne s s tha tv a r i ous o the r me tho ds f or c alc u l ati ng the es tat e’ s s hare o fthe re fund ar e a l so a va ilab le

— mos t o b v i o us l y , the c o ur t c o ul d e nd e a v or to cal cul ate the pre- peti ti on w i thhol ding l ess the pr e- peti ti on8 N o. 09

- 3478 l i ab i l i ty, r athe r tha n c o m par i ngthe pr e- pet i ti o n wi th

hol ding to the full

- yea r l i ability as the D onnell c o ur tdi d. Bu t we do notneed to theo ri ze about the i deal m etho d f orcal cul ati ng the se am ounts. Our r ol e i s o nl y t o eval uate th e ev idence pre sente d by the Trust ee and to det er m i ne whethe r sh e m et he r b ur dent o s ho w the am ount that s houl d be i ncl ud ed i n the bankr up tcy es ta te
. I t i s to tha t bur denwe no w tur n. Under the de func t Ban k r upt cyAct, we l ai d o utthe bur den s o fpe r su as i o n i n tur no ve r a ct i o ns a s f o l l o ws. The t r u s t e e mu s t b r i n g th e a c t i o n t o c l a i m p r o p e r t y f o r t he bankr up tcy estate , and she bear s the bur den ofes tabl i shi ng a prim a faciecase for turn over. Go re nz v. Ill. D ep’t of Agric. , 6 53 F
. 2d 11 79 , 1 18 4 (7th Ci r . 1 98 1) ( ci ting M agg io v. Zeitz , 33 3 U.S
. 56 ( 1948 ) )
. Once a pr i ma faci e case i s e stabl i shed, the debtorm ust pro vi de a r eas on f orgo i ng f or w ar d w i th the case, but the ul ti m ate burden of p er su as ion rem ain s w ith th e t ru st ee atall ti m e s. Id. Se e In re U
. S.A. D iversi fi ed Products, Inc. , 19 6 B. R. 80 1, 805 ( N
. D. I nd. 1 99 6) ( appl y i ngthi s appr o ac h un derthe C od e); In re Sch neid er, 4 1 7B. R. 9 0 7, 9 1 9 ( Ba nk r . N. D. I l l
. 2 009) ( sa m e)
. W e ta k e th i s o ppo r tu ni tyt o pl ac e o ur i m pri m aturo n this ap proa ch und erthe Bankruptcy Code. A ski ng the tr ustee to engage in exte nsi ve i nvesti gat i ons and com pli cate d cal cul ati ons bef or e fi l i ng a turno vero rderwil l nece ssa ri l y r esul t i n i ncre ase d cost s t o the b a nk r up t c y e s t a t e , s e e 1 1 U. S
. C. § 5 0 7 ( a ) ( 1 ) ( C)

— co st s th atwe do not beli ev e ar e ne ce ss ar y unl es s an d unt i l the de bt or p rovide s a r ea so n t o g o f o r war d. At the sam e tim e, ou r app roach gi ves eve ry de btor th e op p ortuni ty to chal l enge the t rust ee’ s pro posed as ses sm ent o fN o. 09

- 3478 9 th e es ta te ’ s i nt er es t. The wea k erthe t r us tee’ s ca se , the eas i eri t wil l be f orthe debtorto upset i t. There i s s om e dispute w hetherthe tr ustee m ust e stabl i sh the es tat e’ s r i ght t o th e proper ty by a pre pond er ance of the evid en c e o r by the m ore de m an d ing stan d ard ofcl earand c onvinci ng ev i dence. Com pare In re Q uality H eal th C a re, 21 5 B. R. 54 3, 54 9 ( Bankr. N
. D. I nd
. 19 97) ( adopti ng the pre pond er ance- of

- evi dence st andard base d o n G rog a n v . Ga rner, 4 98 U
. S. 27 9, 28 6 ( 1991 ) , wh i ch appli ed that sta nd ar d t o dischar geabi l i ty excepti ons) wi th Evans v. Rob b i ns , 89 7 F
. 2d 966, 968 (8 th Ci r. 19 90) (app lyi ng th e clear-and -conv incing-evid en ce stan d ard ). Se e a l so O ri el v. R u ssel l , 2 78 U. S
. 3 58 ( 19 29 ) ( appl y i ng the c l ear - and-co nvi nci ng st andard to a tur noveract i on a l mos th a l fa c e ntur y p r i o r t o the a do pt i o n o fthe Ba nkrupt c y Code). A l though we thi nk tha t the def aul t pr epon derance st andard that the S up re m e Cour t a pp l i ed to di sc ha r g eabi l i tyi n Grog an i s probabl y t he approp r i a t e o n e a l s o f o r tu r n o v er act i o n s , b e c a u s e we w oul d com e t o the s am e co ncl usi on i n this case under ei therev i dentiar y s tandard, we need not re sol ve that i ssue today.

B W i th thi s backg ro und es tabl i shed, we are r eady t o l oo k at the Truste e’ s prim a faci e case i n supp or t o fher as se rt ion th at $9 73 .6 0 from M ey er s’s 20 07 refu n d s s h ou ld be tur ne d o ve r t o the e st at e. The Trustee i den ti fi ed th e va l ue o fthe 2 00 7 ta x r efunds , pr o per l y c al cul at ed th e10 N o. 09

- 3478 pr o rat a by days s hare , and asked t h e di str i ct c ourtto acce p t thi s ca l cul ati on. Thi s e vi dence al one m ay be enough f ora prim a faci e ca se , bu t t he Tr us te e went fur th erhe r e. S he no te d, a s des cr ibe d abo ve, th at th e d eb to r’s inc om e a n d w it h h o l d in g a d va n c ed ata fair ly st ea dy r at e th r o ug ho utthe ta x yea r, a nd the r e wer e no i ncom e or w i thhol ding spi kes after she fi l ed he r b an kr upt cype ti ti on tha t woul d b e swe pt i n un f ai r l y b y the pr o rat a m etho d. The d ist ric t co urt note d, f orexam ple , th atM ey er s’ s pr e- pet i ti o n a nd po st
- pet i ti o n wi thho l di ng re pres en ted si m i l arper centag es ofherta xabl e e ar ni ngs ( 17. 6% ve rs us 16
. 9% )
. ( M eye rs di sputes thi s ca l cul ati on i n h erb r i ef s to thi s co ur t, b uthe r a l te r na tiv e er r o neo u sly u se d g ro ss inc om e ra th er th an ta x ab le in c om e.) I n f ac t, a s o ur t ab l e ab o ve i ndi ca te s, the pro rat a by day s m etho d r epr es en ts a s m al l err eque st( 73
. 42% of th e re fund s) than a ca l cul ati on b as ed on the pre

- peti ti on p ro p or tio n of M ey er s’s to ta l in c om e, gr os s t ax ab le i ncom e, o r f edera l and sta te w i th hol ding ( ra ngi ng fro m 76 % t o 78% )
. These data were goo d enough f orthe bankruptcy cour t a nd the d ist rict co urt, and they ar e g oo d enough f orus. H avi ng e st abl i shed the prim a faci e case f or turn over, w e look to the de btor for re a s o n to go f orw ard
. M eyers did n o tme e tthi s o b l i g a t i o n. On e wo ul d h a v e e xp e c t ed a deb to r i n h erpo si ti o n t o pr esent spe ci fi c f ac ts s ho wi ng w here and how the pro gr ess i on o fherin c om e, l i abi l i ti es, and w ithhol ding devi ate d fr om a perfectl y l i nearfuncti on, thus m aki ng the pr o rat a by days m etho d a poor fi t. M eye rs to ok a di ff er ent t ack, argui ng vo ci f er ousl y f or ana l te r na ti ve c al cul at i o n o fthe e st at e’ s s ha re , wi th o utN o. 09

- 3478 11

m uc h att en tion p aid to th e sp ecifi c s o f h er case. M eyers w an ts us to apply D onnell, and that i s nea rl y a l l she has to say o n the m att er . ( M eye rs has l ong si nce ab andoned any cl ai m s re gar ding potenti al l y diff er en t a l l oca ti on ru les for t ax cr ed its .) Po i nt i ngt o a s i ng l e b a nk rupt c y c o ur tde c i s i o n a pp lyi ng a differen t m eth od ology i s not en o u g h t o un d erm in e t h e T ru st ee ’s c alc u lat ion s. M ey er s’s p os itio n is p ar ti cul ar l y wea kb ec au se the c o ur t i n D onnell base d i ts co nc l us i o n o n the f act th atthe Do nne l l s’ s i nc o m e an d w i thhol ding var i ed. M eye rs pre sents no evi dence of such var i abi l i ty h er e; to the contr ar y, the Truste e’ s data sh ow th at M ey er s’s fina n c ial p ict u re w as rea so n a b ly stabl e thro ugh the yea r. The re m ay be a deeperpro bl em wi th D onnell
. Both the Trust ee and the b ankr up tcy cour t e xpresse d skepti ci sm a b out i ts soundness, bec au se of the r i sk that the D onnell a ppr o ac h c o ul d r equi re the pr e- peti ti on credi tor s t o ass um e pos t- peti ti on t ax l i ab ilitie s. E x p re ss ed an ot h er w ay , D onnell ’ s a pp ro ach opens the d oo r f orthe debtorto tr ansf or m pre - peti ti on ass ets i nto post- pe tit ion i ncom e by“pre

- payi ng” pos tpet i ti o n t ax es . Thi s r es ul t ca n b e av o i ded byr equi r i ng the par ti es to prese nt ev i dence abo ut the speci fi c f acts ofthe case and then dete rm i ni ng pre - peti ti on a sse ts w i th r efer ence to thos e f acts
. M eye rs al so sugge sts thatl oo ki ng atta x l i abi l i ty on the date o fthe peti ti on i m proper l y req u i re s the debto r to m ake a “shor t- yea r el ecti on. ” Se e 26 U
. S. C. § 1 39 8(d)( 2) ( al l ow in g a d ebto r to spl i t the ta x yea r at the b ankr up tcy com m encem ent date )
. W e do not fi nd thatanal ogyto be12 N o. 09

- 3478 apt. The sho rt
- yea r el ection co m es w i th m any c onse qu en ces, not all of w hich w ou ld fol low from a c ou rt’s deci si on t o ap plya si m i l arm etho d to cal cul ati ng l i ab ility . See , e . g. , i d. § 1398 ( d)( 2) (E ) (r equi ri ng se parat e t a x r e t ur ns f o r t he t wo - pa r t s o f the t a x y e a r )
. Us i ng a ca l cul ati o n tha t par al l el s th e sh o r t- y ea r e l ec ti o n h as no tax c on se quences f orthe debtor
. U nd erthe Bankruptcy C od e, th e c ou rtm u st d ec id e w h at p ro p er ty be lon gs in the b ankr up tcy est at e; i fthe bestm etho d happ ens t o l oo k l i ke an i n vo lu n tary opti on under the Tax Code, so be i t. F i na l l y , at o r al ar g um en t M ey er s i ns i st ed th at ta x w ithhol ding i s o pti onaland that the D onnell m etho d i s n ec essa r y t o a vo i d pe na l i zi ngthe de bt o r f o r wi thho l di ng i nc o m e. W e di spu te b oth the pr emi se a nd the c o nc l us i o n. W i thhol ding is not al w ays o pti onal, se e id
. § 3402 ( a) ( 1) (“E xc ep t as oth erw ise p r ovide d i n th is section, every em plo yerm aki ng paym ent o fwages s hal l deduct and w i thhol d up on s uch w ages a tax deter m i ned i n acco rdance w i th tabl es orco m pu tat i on al procedure s presc ribed by the Sec re tar y. ”) , and in a ny ev ent, a case -byc as e c alc u lat ion of p re - an d p os t-p et itio n as se ts sh ou ld avo i d any o utcom e that w ou ld p ro perl y b e s een a s a penal ty. I n sum , the Truste e pr ese nted a prim a faci e c a se f o r t he pro r at a b y da y s me tho d. No ne o fMey e r s ’ s a r gum ents persuades us thatthi s a pp ro ach i s a b ad fi t f orhercas e. Evidence i s cl earand convi nci ng i fi t “ l eave [ s] no re aso nable do ubti n the min d o fthe t r i ero ff ac t as t o the tr uth ofthe propos i ti on i n quest ion, ” D a vis v . Co m bes ,N o. 09

- 3478 13 294 F. 3d 931, 93 6- 37 ( 7th Ci r. 20 02) (inter nal quotat i on m arks o m i tt ed) , a nd pr o o fb y a pr epo nde r an ce o fthe ev id en c e m ea n s t h at th e “ tr i e r o ffa c t m u st be liev e t h at it i s m or e l i kel y than not that the evi den c e e stabl i shes the p ro posi ti on i n questi on, ” A m erica n G rai n Trim m ers, In c . v . O f f i c eo f Wo rk e rs ’C o mp e n s a t i o n P r o g r a ms , 18 1 F
. 3d 810, 81 7 ( 7th Ci r. 199 9). W hi l e we ag re e that the pro rata byd ays m etho d m ayno t be a o ne - si ze - fi ts
- al l s o l ut i o n, b y a n y s ta n d ar d th e T ru st ee h as m et h er bu rd e n in thi s ca se. Fo r these r eas ons, we A FFIRM th e j u d g me n t o ft he dist ri ct c ourt
.

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