Source: https://procedurallytaxing.com/category/beard/
Timestamp: 2019-04-21 08:13:36+00:00

Document:
A copy of the 9th Circuit’s opinion issued today in the Smith case can be found here: Smith v. United States. We will have commentary about the opinion in coming days. Like the recent opinion from the 11th Circuit, the 9th Circuit goes back to pre-2005 law to decide the case and passes on the opportunity to address the one day late rule. Because the IRS does not argue the one day late rule and because the debtor will never argue for that rule, it requires affirmative action by the Court as the 10th Circuit took in Mallo to raise the issue.
I have previously written on several occasions, here, here, here, here, and here, about the interpretation of the bankruptcy code concerning the discharge of taxes related to tax years for which the taxpayer files a late return. Three Circuits have ruled that when a taxpayer files a late return, even a moment late though that is rarely the case, the taxes related to that return can never be discharged because of the language added to Section 523(a) of the Bankruptcy Code in 2005. Though the IRS does not yet agree with the determination of the Circuit courts, its representative has stated that it may have to reconsider that position if more Circuits adopt the strict reading of Section 523(a). At present, taxpayers living outside the 1st, 5th or 10th Circuits can generally discharge their federal taxes even if they have filed a late return as long as they did not cause the IRS to prepare a substitute for return (SFR) with respect to the period. If the IRS had to go to the trouble of preparing an SFR, it will take the position that any tax liability for the period is excepted from discharge.
Enter the next case in this saga. On June 29, 2016, the District Court for the District of New Jersey, which is within the 3rd Circuit, entered an order certifying the issue to the 3rd Circuit from the bankruptcy court.
Mr. Davis filed a Chapter 7 petition on July 24, 2012. He listed the IRS as a creditor for just over $100,000. Before he filed his Chapter 7 petition, the IRS prepared SFRs for him for 2005 and 2006 since he had not had time to prepare his own tax returns. After the IRS prepared the SFRs, sent the notice of deficiency, waited for the 90-day period to file a petition in Tax Court to run and assessed the liabilities for these two years, Mr. Davis freed up some time and filed Forms 1040 for each of the years on January 28, 2010. The Forms 1040 he filed reduced the liability by small amounts in each year. He waited more than two years after filing the Forms 1040 before filing his Chapter 7 bankruptcy petition. The IRS treated the 2005 and 2006 liabilities as excepted from discharge for the reasons discussed in the prior blog posts and not because of a strict reading of Section 523(a) of the Bankruptcy Code.
Probably because the Chapter 7 case did not get Mr. Davis where he wanted to be with respect to his federal tax obligations, he filed a Chapter 13 petition on August 11, 2014. Seems like he could have saved a lot of time and trouble by filing his returns on time or even working with the IRS when it undoubtedly began a long chain of correspondence with him about the unfiled returns, but that’s not what happened. The IRS filed a proof of claim for over $60,000 of which a small portion was secured, a small portion was priority (for a later year) and the largest portion was general unsecured. Mr. Davis disputed the debt from 2005 and 2006 arguing that it was discharged in his prior bankruptcy. The bankruptcy court granted his motion. The bankruptcy court relied on an earlier decision in the bankruptcy courts of New Jersey, In re Maitland, 531 B.R. 516 (Bankr. N.J. 2015) which had rejected the decisions of the three Circuit courts. The Davis court also rejected the IRS argument that the Forms 1040 filed after an SFR did not cause the exception to discharge to apply. Finding Maitland persuasive, the bankruptcy court held that “there is no timeliness requirement when determining if a filing constitutes a return for purposes of discharge” and ruled that the late filed Forms 1040 filed more than two years before the first bankruptcy petition met the requirements of Section 512(a)(2)(ii) for purposes of meeting the requirements of returns to be discharged. The IRS filed a notice of appeal to the district court and Mr. Davis moved for certification for direct appeal to the Third Circuit.
The IRS opposed the certification which surprises me from the perspective that getting this issue resolved will reduce its exposure for a large drawer full of potentially discharged cases on which it is violating the discharge injunction. It is certainly not clear that a resolution would result in a holding that the IRS is violating the discharge injunction on a wholesale basis but since that is, at least, a possibility, I would think that the IRS would want to resolve this issue as quickly as possible and seek certification in as many cases as possible. The IRS opposition to certification points to exactly the problem with the position it has taken since Hindenlang. It argues here that the issue is not a purely legal issue and that’s the rub because the IRS bankruptcy specialists sure want to treat it as if it is a purely legal issue to which they can apply mechanical tests. The IRS seems to argue to the district court that the discharge issue here is “heavily dependent on the particular facts of the case.” Why it would want to make such an argument is mind boggling. Does it think that its bankruptcy specialists are making case by case decisions? Does it want them to do so? The IRS should be desperately seeking a legal decision. It has tens of thousands of these cases to review and cannot possibly make a heavily dependent factual determination. I did not go and read the IRS brief but only the characterization of its position. The district court says that the IRS characterized the bankruptcy court’s decision as fact dependent. Maybe that is the distinction between my concerns and its arguments but it should want the court to treat it as a legal decision rejecting its argument.
Because this case is between the IRS and the debtor, the issue of the one moment late rulings of the three circuit courts will not necessarily be argued to the 3rd Circuit. The 3rd Circuit, however, will not be blind when it starts researching this issue and when it reads the last paragraph of the district court order. In the Mallo case the 10th Circuit got to the one moment late issue even though only the IRS was before it. The Third Circuit will quickly discover that there is a very simple way to dispose of this case that does not turn on intent or the bankruptcy court’s view of the timeliness requirement vis a vis SFRs. So, this may be the next case to address the issue regarding the late filing of a tax return and the discharge of the liabilities for the year(s) when the returns are filed late.
In Justice v. United States, the 11th Circuit had the chance to become the fourth Circuit Court to rule on the impact of the unnumbered paragraph, aka (*) paragraph, at the end of B.C. 523(a). It passed on the opportunity and went back to the roots of this issue before siding with the majority of Circuit Courts that addressed this issue based on the pre-2005 law. Mr. Justice loses because the majority of Circuit Courts deciding the issue prior to 2005 held that debtors filing a Form 1040 in circumstances similar to his were not filing a tax return under the Beard test. I think everyone loses because the opinion just defers to another day the resolution of the (*) paragraph problem. I have written about this issue on numerous occasions and the last post has links to the earlier ones.
The Justice case provides a nice review of the law as it existed when Congress tried to fix the problem in 2005. Because the Court essentially ignores, or leaves for another day, the 2005 legislation, those following this issue simply have another opinion that follows the way the case law was developing prior to the legislative change. By deciding the case based on pre-2005 law, the 11th Circuit did a disservice to those concerned about this issue including debtors and the various taxing authorities trying to decide how to deal with this discharge provision. Both sides need a speedy resolution to a problem that has persisted for 18 years since the Sixth Circuit decided Hindenlang.
Resolution of the issue is important for debtors because so many individuals fail to timely file their returns. These individuals need to know if their failure to timely file the return means that they are forever barred from using bankruptcy to discharge the taxes or have some hope for relief that seems to exist in B.C. 523(a)(1)(B)(ii). The taxing authorities need to know because every day they must make a decision on whether to discharge a debtor in these circumstances. The longer the uncertainty lingers, the more debtors that have what may ultimately turn out to be a wrongful discharge determination and the more trouble the taxing authorities will have unwinding the situation. The IRS continues to resist applying the harsh discharge rule as interpreted by three Circuit Courts but it has no obligation to continue to do so in the face of continuing uncertainty and given the certainty that the harsh rule provides.
The problem with the pre-2005 state of the law and the problem that the Justice opinion prolongs is the difficulty of administering a law concerning discharge based on a case by case factual determination of whether the late for 1040 represents a meaningful attempt to file a return under the Beard test, there by resulting in a discharge, or does not represent a good faith attempt to file, thereby resulting in an exception to discharge. The IRS has offered a post-2005 alternative which provides certainty, viz., if the debtor does not file the return until after the IRS makes an assessment based on an SFR then the debt is always excepted from discharge because it is not a return and if the debtor files the late return before an assessment based on an SFR then the two year rule applies. The IRS offered up this outcome to the 11th Circuit but it was not buying what the IRS was selling. So, it sticks the parties with the factual determination test.
To its credit the 11th Circuit seems to choose the “best” of the factual determination cases – Moroney out of the 4th Circuit but Moroney is still a factual determination case at its heart although one in which the debtor will almost always lose making it easy for the IRS to administer and for debtors to predict the outcome. The application of the Moroney rules will almost always create the same result the IRS seeks in its post-2005 argument for a legal test but it does not quite get all the way to the legal test.
Last week I was working on a case in the clinic that demonstrates the problems with the application of the harsh (*) rule and cries out for a simple solution. The individual owes for three years and has a total liability over $60,000. For each of the three years he was running a small business and requested an extension of time to file his return. He clearly filed two of the three returns on time but he may have filed the third year late by a week or two. The year is old and I am trying to get a definitive answer on when the return was filed because it is so critical. The individual has a very low income now but has recently married someone with a good income. Because of her income, I do not think he can obtain an offer in compromise without a very high payment. He is someone who has always filed. With the possible exception of the one year where I am trying to find out if the return was timely filed or filed shortly after the extended due date, he has always filed timely. The IRS did not impose a late filing penalty on him and would have abated the penalty based on its first time abate rules if it had imposed the late filing penalty. Yet, if it turns out he did not timely file, he cannot discharge this debt in bankruptcy because he lives in the First Circuit. Because he got married to someone with a good and stable income, he also cannot obtain an offer unless his new spouse is willing to pay off his long outstanding and substantial tax debt. Understandably, she is not excited about paying off his old tax debts and the situation is putting a strain on their relationship. So, he may end up waiting out the statute of limitations on collection and putting pressure on his marriage.
This is a wasteful policy dilemma. Section 523(a)(1)(B)(ii) set up a system to allow late filers to still obtain a discharge if they waited extra time. In the case of my client, who, if he filed late, did so immediately after the due date, would not even have to wait extra time because of the timing of his filing. Yet, he appears to be prevented from obtaining a discharge for this year. By demurring on the correct interpretation of (*) the 11th Circuit sentences those seeking to know the answer to a longer wait. No matter which way it ruled, having the opinion of the 11th Circuit on (*) would have helped to move the issue to resolution faster.
Les’ post discussing how filing within 10 days of an e-file rejection will still result in a timely return. This work around will not present itself often but is worth remembering for those situation where your client has tried and failed to timely file their return electronically.
Who Won the Sanchez Case?
In sports, sometimes a team loses an important game and later is awarded the victory because the other team was disqualified. That is what may happen in the recently decided case, Sanchez v. Comm. In Sanchez, the taxpayer sought innocent spouse relief in the Tax Court and lost her case because the Court held no joint return was filed. But the underlying assessment of a joint tax may have been erroneous. If the assessment is found to be invalid the taxpayer will probably have no tax liability.
The taxpayer and her spouse were married in 1988 and separated in November 2006. The taxpayer filed for divorce in 2007 and it became final in 2011.
For all years before 2006, the taxpayer and taxpayer’s husband (hereafter the TPH) filed joint returns. They relied upon an accountant, who communicated solely with the TPH. Although she did not review the returns, the taxpayer did sign the prior year returns.
The TPH separately filed his 2006 income tax return in October 2007 and claimed a filing status of single. He did not claim the taxpayer as a dependent. The taxpayer did not file an income tax return for 2006. The taxpayer first became aware of the TPH’s return after it was selected for examination.
The Court noted in the opinion that the record was unclear if the taxpayer had a duty to file a separate 2006 income tax return.
After the IRS proposed a deficiency, the examiner informed the taxpayer and the TPH that it would benefit them if they filed a joint return. The benefit was the tax due would be less. The taxpayer and the TPH signed a Form 4549 agreeing to the proposed adjustments to tax. One of the adjustments involved a change in filing status from single to joint filing status. In agreeing to the adjustments, the taxpayer agreed to joint and several liability. The IRS accepted the agreement and assessed the tax as a joint tax.
On May 16, 2011, the taxpayer filed a claim for innocent spouse relief on Form 8857.
The IRS disallowed the claim and the taxpayer filed a petition in Tax Court.
The Court held that no joint return was filed.
A Joint Return is an Element of section 6015.
As the Court noted, section 6013(a) provides that a married couple may elect to file a joint return. If a joint return is filed, both spouses are jointly and severally liable for the tax. If a joint return has been filed, a taxpayer can file a claim for relief from joint and several liability. A claim for innocent spouse relief request is normally initiated by filing a Form 8857 with the IRS.
Section 6015 provides for three types of innocent spouse relief. All three subsections require that a joint return must have been filed. See IRC sections 6015(b), (c) and (f). If no joint return has been filed, the taxpayer is not jointly and severally liable and the Court does not acquire jurisdiction to consider a claim for innocent spouse relief.
Was a Joint Return Filed in the Sanchez Case?
The threshold issue in the Sanchez case was whether a joint return was filed by the taxpayer and her spouse. Whether married taxpayers file a joint income tax return is a question of fact. As the Court noted in Estate of Campell, “Married taxpayers must intend to file a joint return.” Many fact scenarios can arise. For example, sometimes one spouse has not signed the return. Another situation, which was presented in this case, is where one spouse files separately and then later the second spouse agrees to file a joint return. The right to make a joint return after one spouse files a separate return is subject to certain exceptions not presented in the Sanchez case. See IRC sec. 6013(b)(2).
The Court recognized the taxpayer’s right to file a joint return after her spouse’s separate return had been filed, but the Court concluded that the taxpayer’s efforts to file a joint return were not sufficient to constitute an election.
At the outset, it is surprising that the issue of whether a joint return was filed even arose in Sanchez. Normally, you would expect this issue to arise in a case where a taxpayer contends that he or she either did not file a joint return or never intended to file a joint return. For example, if one spouse insists that the other spouse improperly signed his or her name. These cases often involve opposing testimony and might turn on a number of factors including whether the taxpayer tacitly approved the spouse signing their name to the original return. It is unusual, in my experience, for the issue of a joint fling to arise when both the IRS and the taxpayer agree there was a joint filing.
In Sanchez, the court rejected the taxpayer’s argument for the following reasons: the Court held that the consent, Form 4549, signed by the taxpayer and her spouse agreeing to the joint and several liability should not be treated as a joint return.
The original return in the Sanchez case was audited and the revenue agent proposed a deficiency. During discussions with the spouse, who filed the original return, and the taxpayer, the revenue agent explained that if the spouse and the taxpayer agreed to file a joint return, the proposed deficiency would be reduced. Although the full nature and extent of the discussions is not known, apparently the taxpayer concluded that it was in her best interests to agree to a joint filing. It is not clear from the reported case, but it appears that the taxpayer may not have had any income in the taxable year. So, in making the computation of taxable income, the revenue agent proposed making adjustments relating to the TPH’s income and the revenue agent also proposed making an adjustment to the filing status claimed on the original return. Because the taxpayer was agreeing to joint filing, the filing status on the Form 4549 was changed from “single” to “joint”. It is routine for the IRS and taxpayers to resolve cases through the use of Form 4549. Further, it is not uncommon for a change in the filing status of taxpayers to be included on a Form 4549.
Under the Beard test, a document must meet four tests to be a return: (1) purport to be a return, (2) be executed under penalty of perjury, (3) contain sufficient data to allow the calculation of tax, and (4) represent an honest and reasonable attempt to satisfy the requirements of the law. In Sanchez, the Court rejected the Form 4549 in large part because the Form 4549, signed by the parties, did not contain language regarding perjury. Notwithstanding the absence of a jurat, the author believes that the IRS and the taxpayer made an honest and reasonable attempt to satisfy the requirements of the law.
While the Court rejected the Form 4549 as sufficient to establish a joint filing, there is much to suggest that signing the Form 4549 is sufficient. First, the parties made mutual promises. The IRS allowed the spouse and the taxpayer to benefit from the more favorable tax rates for joint filers. On the other side, the taxpayer agreed to joint and several liability for the taxes. It does not matter if the taxpayer fully understood the consequences of agreeing to the joint return. What matters is that she understood that she was filing a joint return and receiving consideration – a lower tax – for her consent. It is a fair bargain and it should be binding on the IRS and the taxpayer.
Certainly both the IRS and the taxpayer went forward with the belief that the taxpayer had elected a joint filing. Based upon the taxpayer’s agreement to be bound by the joint filing, the IRS assessed the tax and began collection activity. On the other side, believing that she owed the taxes, the taxpayer eventually filed for innocent spouse relief. The IRS accepted the Form 8857 for processing. It is a condition for processing a request for innocent spouse relief that the taxpayer has filed a joint return. If the IRS did not believe that there had been a joint filing, it would not have made a final determination denying innocent spouse relief. The final determination was the basis for the court proceeding in the Sanchez case.
But the court has now ruled that no joint return was filed and there is no appeal from a small case and the Court’s decision will soon be binding on both parties.
Normally, after a decision in an S case, the amount of a deficiency, if any, is established. But that is not the case in the Sanchez case. The tax liability was not before the court – only the innocent spouse issue. Because the filing of a joint return is a prerequisite to the Court granting appropriate relief under IRC section 6015(e), the Court never reached the merits of the Service’s final determination denying innocent spouse relief. The Court’s decision denied the taxpayer a right to review, but the decision appears to have created other rights.
…it is appropriate to state that nothing in this Summary Opinion should be taken to comment as to the assessment made against petitioner on the basis of the consent.
Although the court’s comment does not address the tax consequences of the decision, the tax consequences appear to heavily favor the taxpayer. While she did not achieve a favorable result on her request for innocent spouse relief, she did not leave the court without a potential remedy. While an S case cannot be cited as precedent and may not be appealed, the decision is final as between the parties. See IRC section 7463(b).
The court ruled that the taxpayer did not file a joint return with her spouse. The decision has significant legal impact on the taxes assessed pursuant to the consent. As assessment based upon a joint filing no longer exists. Moreover, the statute of limitations for filing a joint return has probably expired. See IRC section 6013(b)(2)(A). It is hard to imagine that the IRS would take the position that petitioner remained liable for the taxes based upon the reported income of the taxpayer and her spouse. If the statute of limitations on assessment is still open, it is far more likely that the IRS will split the joint account into two separate accounts and recompute each individual’s separate tax based upon their separate income and expense items. But, the year involved is 2006 and it is unlikely that the statute of limitations on assessment is still open.
If the IRS stubbornly continues to pursue collection, it seems to me that the taxpayer could file a petition in Tax Court alleging that the IRS had not followed the deficiency procedures and was collecting the tax based upon an illegal assessment. The Tax Court would almost certainly rule in the taxpayer’s favor.
At the end of the day, it turns out that the taxpayer in Sanchez, not the IRS, may be the ultimate winner in this dispute.
Like a virus jumping from one species to another recent 10th Circuit decision in Mallo v. United States has moved the issue of the discharge of late filed returns from a state to a federal issue. Because of the unforgiving nature of the position adopted by the 10th Circuit, the decision causes concern for any taxpayer who misses the filing deadline, even by one day (or minute or hour) and later wants to discharge the taxes for that period.
I wrote about this issue in a post generally describing the ongoing disarray in the discharge area in 2013. Unfortunately, the situation has not gotten any better and, with the 10th Circuit’s decision, it has gotten worse. This post primarily will describe the Mallo case in shrill terms and offer one possible way around the predicament in which the Mallos now find themselves. Before I get to the shrill part of the post, I will explain briefly how we got to this point. I think the problem all started with an attorney who dreamed up a slick idea to help his client get past the discharge provisions and Department of Justice attorneys who countered with an equally slick argument that eventually spiraled into a new code provision creating havoc no one could have imagined at the beginning of this process.
Bankruptcy Code § 523(a)(1)(B)(i) excepts from discharge taxes (federal, state or local) for which the individual taxpayer fails to file a return. This provision does not create much controversy and everyone agrees that if the person has failed to file a necessary return all of the unpaid tax for that period passes through bankruptcy without the benefit of a discharge with the person still owing the taxes at the end of bankruptcy. Bankruptcy Code 523(a)(1)(B)(ii) excepts from discharge taxes (federal, state or local) “with respect to which a return, or equivalent report or notice, if required was not filed or given after the date on which such return, report or notice was last due, under applicable law or under any extension, and after two years before the date of the filing of the petition.” This subparagraph basically requires a taxpayer who files a return late to wait at least two years after filing the late return before filing bankruptcy if the taxpayer wants to discharge the liability for that period. The idea behind the provision relates to the need for taxing authorities to have a decent amount of time to collect a tax before Congress will allow it to fall off the books.
Into this scheme comes Mr. Hindenlang. He had not filed his return for a year for which he owed federal taxes. I imagine that he visited his bankruptcy lawyer who told him that if he filed bankruptcy at that point, even though the taxes were old, he could not get rid of them through bankruptcy. After not filing his return, the IRS had gone to the trouble to compute his liability for the year at issue using the procedures of IRC 6020(b). Someone, however, came up with the bright idea that if Mr. Hindenlang sent to the IRS a Form 1040 for the year at issue and filled out that form using exactly the information that the IRS used in recreating his return he could then wait two years and one day and file bankruptcy and discharge the liability. So, he waited the requisite period and then filed bankruptcy arguing in the bankruptcy case that the taxes were discharged because he now technically met the requirements of Bankruptcy Code 523(a)(1)(B)(ii). The argument made sense if the late filed Form 1040 is a return for purposes of the statute and the argument also seemed to fit with the reason for the exception to discharge which was to give the taxing authority ample time to collect before discharging the tax.
The IRS, however, did not take this laying down and it, or its lawyers, could be just as clever as Mr. Hindenlang and his lawyer. It argued that the Form 1040 submitted by Mr. Hindenlang did not meet the definition of return because looking at the factors established by the Tax Court in the Beard case the taxpayer did not really possess the intent for this document to be a return. The IRS won that case but with an argument that required it to make a case by case determination. It ultimately prevailed in some circuits while losing in the 8th Circuit and settling for some additional language in the 2005 Bankruptcy Reform Act. The new language that was intended to settle this issue has spawned a new level of problems.
The new language, which comes in an unnumbered paragraph at the end of 523(a) provides: “For purposes of this subsection, the term ‘return’ means a return that satisfies the requirements of applicable nonbankruptcy law (including applicable filing requirements).” This first sentence of the new language has taken some courts in a different direction concerning the discharge of taxes reported on late returns. The 5th Circuit in the McCoy case held that this language makes any return that fails to meet the filing requirements, including the time for filing a return, a period for which the liability cannot receive a discharge. The IRS rejected this view, correctly in my opinion, of the new language because of the inability to reconcile this view with the two-year rule of Bankruptcy Code § 523(a)(1)(B)(ii). It looked like this interpretation would only apply to state or local liabilities where the state or the locality, like Mississippi in McCoy, chose to apply this draconian rule.
Like a virus crossing from one species to another, however, the Mallo case marks the crossing of this view into federal tax liabilities. The crossing into a new species of case did not occur because the IRS sought this result. Rather, the IRS made its official argument now that “a debt assessed prior to the filing of a Form 1040 is a debt for which [a] return was not ‘filed’ and therefore cannot be discharged in bankruptcy.” Citing the well-reasoned Rhodes case from Georgia that I blogged previously, the 10th Circuit rejected the argument of the IRS and, on its own, adopted the 5th Circuit’s view in McCoy quoting from an earlier 10 Circuit opinion stating “we cannot reject an application of the plain meaning of the words in a statute on the ground that we are confident that Congress would have wanted a different result. . . . In short, courts, out of respect for their limited role in tripartite government, should not try to rewrite legislative compromises to create a more coherent, more rational statute.” Okay.
Late filing taxpayer in the 10th Circuit might want to start taking up a collection to pay someone to file a cert petition in Mallo. Their problem will be the lack of a conflict on this view at the Circuit level unless the Supreme Court looked back to pre-2005 cases. They might use the money to lobby their favorite Congressperson to change the law again and try to make it clearer what it intended to say in the first place. I believe the National Taxpayer Advocate will include this issue in her annual report to Congress next week as one of the major problems and maybe that will give them a greater than 0% chance of getting Congress to enact legislation.
So, what do you do if you are faced with a case against the IRS over a discharge issue outside the 10th Circuit and you are worried that your court might do what the 10th Circuit did and impose the plain meaning of the unnumbered paragraph on your client to deny discharge. I spoke to Ken Weil about this case. Ken co-authors the bankruptcy chapter in Effectively Representing Your Client before the IRS and served on the tax advisory committee to the reform commission appointed by Congress following the 1994 Act whose recommendations formed the basis for the 2005 amendments to the bankruptcy code including this one. Ken suggested entering into a stipulation that a return filed late is not per se a violation of the “applicable filing requirements” rule and that portions of McCoy and Mallo applying such a one-day late rule do not apply. He credited this suggestion to Morgan King who practices bankruptcy and tax law in California. I cannot say if that strategy will work. I can only say that a very deadly strain of argument previously confined to state tax issues has now crossed over to federal taxes and individuals who did not file their returns before the due date had better start thinking of some arguments if they ever want to use bankruptcy as a basis for relief.

References: v. 
 v. 
 v. 
 v. 
 § 523
 § 523