Document: 535 U.S. 43 YOUNG ET UX.v.UNITED STATES No. 00-1567. Supreme Court of the United States. Argued January 9, 2002. Decided March 4, CERTIORARI TO THE UNITED COURT OF APPEALS FOR FIRST CIRCUIT If Internal Revenue Service (IRS) has a claim for certain taxes which return was due within three years before individual taxpayer files bankruptcy petition, its enjoys eighth priority under 11 U. S. C. § 507(a)(8)(A)(i), and is nondischargeable in 523(a)(1)(A). The IRS assessed tax liability against petitioners their failure to include payment with 1992 income filed on October 15, 1993. On May 1, 1996, Chapter 13 they moved dismiss reorganization plan approved. 12, 1997, day Bankruptcy dismissed 7 petition. A discharge granted, case closed. When subsequently demanded that pay debt, asked reopen declare debt discharged 523(a)(1)(A), claiming it fell outside 507(a)(8)(A)(i)'s "three-year lookback period" because pertained more than filing. court reopened case, but sided IRS. Petitioners' filing less Holding "lookback tolled during pendency prior concluded had not been when were granted 7. District First Circuit agreed. Held: Section period Pp. 46-54. (a) limitations subject traditional equitable tolling principles. It prescribes rights may be enforced, encouraging protect have elapsed. Thus, serves same basic policies furthered by all periods: "repose, elimination stale claims, certainty about plaintiff's opportunity recovery defendant's potential liabilities." Rotella v. Wood, 528 549, 555. fact commences date precede discovers does make substantive component Code as claim. 46-49. (b) Congress presumed draft periods light principle such are customarily unless would inconsistent statutory text. Tolling appropriate here. petition erected an automatic stay 362(a), prevented from taking steps collect unpaid taxes. later three-year therefore excluded time pending. Because period, lower courts properly held discharged. regardless whether good faith or solely run down period. In either disabled protecting 49-51. (c) provisions invoked — §§ 523(b), 108(c), 507(a)(8)(A)(ii) do display intent preclude 51-53. 233 F. 3d 56, affirmed. SCALIA, J., delivered opinion unanimous Court. Grenville Clark III argued cause briefs petitioners. Patricia A. Millett With her Solicitor General Olson, Assistant Attorney O'Connor, Deputy Wallace, Bruce R. Ellisen, Thomas J. Sawyer. JUSTICE SCALIA 1 extinguish liabilities debtor's 507(a)(8)(A)(i). We must decide this 2 * Petitioners Cornelius Suzanne Young failed return, 1993 (petitioners obtained extension April 15 deadline). About $15,000 owing. 3, 1994, made modest monthly payments ($40 $300) 1994 until November 1995. sought protection States New Hampshire. bulk (about $13,000, including accrued interest) remained due. Before confirmed, however, Youngs 23, pursuant 1307(b). one new This "no asset" meaning no assets available satisfy unsecured creditors, June 17, 1997; closed September 22, 1997. 3 debt. refused petitioned view, Code's period," discharged, 1993, Although Youngs' 1996. Hampshire Appeals 56 (2000). certiorari. 533 976 (2001). II 4 523(a) excepts debts discharge, any "of kind specified section ... 507(a)(8) title, allowed." 507(a), turn, describes claims distribution assets. Subsection 507(a)(8)(A)(i) gives "allowed governmental units, only extent measured gross receipts taxable year ending if required, last due, extensions, after petition...." (Emphasis added.) commonly known period." filed, 5 terms appear create loophole: Since prohibit back-to-back filings (as long debtor did receive 13, see 727(a)(8), (9)), can render dischargeable first then voluntarily dismissing lapsed, finally refiling During 362(a) will prevent taxes, expired, remaining dischargeable. took advantage loophole, which, believe, permitted Code. 6 disagree. principles tolling. nothing precludes we believe below limitation (namely, nondischargeability bankruptcy) enforced. H. Limitations Actions p. (4th D. Moore ed. 1916). Old those pertaining returns become dischargeable, so decree relieve obligation pay. thus encourages by, say, collecting 26 6501, 6502 (1994 Supp. V), perfecting lien, 6322, 6323(a), (f) ed.) sleeps rights, loses becomes concede, "basic [furthered by] provisions: repose, 555 true that, unlike most statutes limitations, bars some, all, legal remedies1 enforcing (viz., bankruptcy); makes limited statute nonetheless. 8 argue Code, procedural "is due," assesses tax. itself risk bankruptcy. 9 To illustrate, offer following variation case: Suppose received here) date. Assume facts unchanged: 1994; 1996; hypothetical, argue, 13. Over elapsed between (April 1993) (May 1996). But discovered enjoyed becoming (by lien). even contemplates possibility, believe. 523(a)(1)(B)(ii) renders arises untimely two 30, (more petition), unaware act became For these reasons, rather definition 10 sense use term, "substantive": They define subset eligible remedies. And distinctively "substantive" merely There unusual claimant complete present action, he aware it. See Corman, Limitation 6.1, pp. 370, 378 (1991); supra, 276c(1), at 1411. As petitioners' reliance 523(a)(1)(B)(ii), proves, most, put different kinds debts. All falling Even falls nonetheless pertains 523(a)(1)(B)(ii). These complementary; suggest something other B hornbook law "customarily `equitable tolling,'" Irwin Department Veterans Affairs, 498 89, 95 (1990), "inconsistent text relevant statute," Beggerly, 524 38, 48 (1998). also American Pipe & Constr. Co. Utah, 414 538, 558-559 (1974); Holmberg Armbrecht, 327 392, 397 (1946); Bailey Glover, 21 Wall. 342, 349-350 (1875). background principle. Cf. National Private Truck Council, Inc. Oklahoma Tax Comm'n, 515 582, 589-590 (1995); Shabani, 513 10, (1994). That doubly enacting applied courts, equity "appl[y] rules jurisprudence." Pepper Litton, 308 295, 304 (1939); Energy Resources Co., 495 545, 549 (1990). 12 situations "where actively pursued his judicial remedies defective pleading where complainant induced tricked adversary's misconduct into allowing deadline pass." Irwin, 96 (footnotes omitted). acknowledged, might cases, see, e.g., Baldwin County Welcome Center Brown, 466 147, 151 (1984) (per curiam), this, one. Amy Watertown (No. 2), 130 320, 325-326 (1889); Story, Equity Jurisprudence 1974, (14th W. Lyon 1918). 362, 7, Hence our view intentions petitions disability C 14 invoke several point explicitly permits proceeding was) proceeding. misread provision. 523(b) declares "a excepted subsection (a)(1), (a)(3), (a)(8) concerning title unless, section, title." 16 phrase "excepted discharge" provision synonymous it) "nondischargeable." envisions progressed stage, particular actually "excepted." application case; did, very arguments favor found persuasive regard 507 apply 523 well. One perhaps expected explicit earlier applies (see 523(a)(3)) need minimal, since separate 727(a)(9), constrains successive discharges Chapters 7: Generally speaking, six elapse petitions, nonexistent. absence suggests nothing. 17 contain Its presence there, 507, displays reads: 18 "Except provided applicable nonbankruptcy fixes commencing continuing civil action ..., expired expire (1) end suspension occurring commencement (2) 30 days notice termination expiration respect claim." 19 108(c)(1) contains split over issue, compare, Rogers Corrosion Products, Inc., 42 292, 297 (CA5), cert. denied, 1160 (1995), Garbe Iron Works, Priester, 99 Ill. 2d 84, 457 N. E. 422 (1983); resolve assuming correct, draw negative inference express 507. quite reasonable instruct (including state courts) toll state-law periods) while, time, inherent powers federal 20 Finally, 507(a)(8)(A), sets forth threeyear 507(a)(8)(A) grants 240 507(a)(8)(A)(ii). Whereas provision, 240-day "any plus compromise assessment pending." appearing demonstrates anything, incorporates An "offer compromise" settlement submitted debtor. enacted, practice though required collection efforts (if Government's interests jeopardized) compromise," CFR 301.7122-1(d)(2) (1978); M. Saltzman, Practice Procedure ¶ 15.07[1], 15-47 (1981).2 equitably inappropriate chosen See, S., 96. supplements displaces 22 conclude judgment 23 ordered. Notes: Equitable still available. Traditionally, example, mortgagee could sue foreclose mortgaged property underlying barredHardin Boyd, 113 756, 765-766 (1885); G. Glenn, Mortgages 141-142, 812-818 (1943); Beach Ocwen Fed. Bank, 410, 415-416 (1998) (recoupment lapsed); Dalm, 494 596, 611 (1990) (same). amended 1998 compromise. 6331(k) ed., V)

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