Opinion ID: 4509115
Heading Depth: 5
Heading Rank: 2

Heading: two years after the order for relief.

Text: 11 U.S.C. § 108(a); see also id. § 1107. Canada’s “order for relief” (i.e., the date he filed his bankruptcy petition) was September 15, 2015. See id. § 301(b). He thus contends that his September 14, 2017 filing of this case falls within 11 U.S.C. § 108(a)(2)’s two-year tolling provision and was therefore timely filed. The Defendants argued, and the district court below agreed, that Canada’s 30-day limitations period was not tolled and thus his fee application was untimely. 18 The court notes that all of the fees Canada seeks to recover were incurred during the pendency of the bankruptcy and they became recoverable when he prevailed in the bankruptcy court and was thereafter affirmed by the initial district court. The tolling provision (11 U.S.C. § 108(a)) is designed to impact or apply to claims whose statute of limitations are already running as of the date of the filing of the bankruptcy petition. See In re Phillip, 948 F.2d 985, 987 (5th Cir. 1991); 2 COLLIER ON BANKRUPTCY ¶ 108.02 (Alan N. Resnick & Henry J. Sommer eds., 16th ed. 2019) (citations omitted). Critically, here, Canada’s claim for fees is based upon 26 U.S.C. § 7430. That provision entitles him to recover attorney’s fees in connection with a court proceeding brought by or against the IRS. No such proceeding occurred until after Canada filed for bankruptcy. Indeed, the relevant controversy was not initiated until the IRS filed its proof of claim in Canada’s Chapter 11 case and Canada disputed it. There can be no dispute that Canada could not recover fees as the prevailing party before a final determination that he had actually prevailed on the penalty dispute; that occurred almost two years post-petition. 18 The Defendants also argue that Canada’s lawsuit must be dismissed because of sovereign immunity. Because this court rejects Canada’s claims against the Government on other grounds, it does not reach that argument. 21 Case: 18-11398 Document: 00515316589 Page: 22 Date Filed: 02/20/2020 No. 18-11398 Canada’s 26 U.S.C. § 7430 claim for attorney’s fees in the bankruptcy case accrued no earlier than when the IRS filed its claim in the bankruptcy court and no later than July 7, 2017, when the IRS could no longer appeal the initial district court’s order affirming the bankruptcy court. Accordingly, that claim is a post-petition claim. Consequently, 11 U.S.C. § 108(a) did not toll the 30-day deadline to request fees. Canada did not file this lawsuit until September 14, 2017, nearly 70 days after the final judgment was entered on the tax penalty claim objection. As such, Canada’s request was untimely under 28 U.S.C. § 2412(d)(1)(B) and Canada is not a “prevailing party” pursuant to 26 U.S.C. § 7430(c)(4)(A)(ii). Canada therefore is not entitled to recover attorney’s fees from the IRS and the district court below properly dismissed his claim.