Dear Robert,
I think you might be misreading the Code.
A discharge under 1328(a) does not discharge debts provided for in the plan that fall under the restrictions in 1328(a)(1), (2), (3), and (4), some of which involve taxes and debts to governmental units (in particular, cp. 507(a)(8)(C) and 523 (a)(1)(B) and (C), all referred to in
In a discharge under 1328(b), 1328(c) (the subsection that limits the scope of the 1328(b) hardship discharge) states that a discharge under 1328 (b) does not include "any debt - . . . of a kind specified in section 523(a) of this title." Thus, while 1328(b)(2) does not refer to
As for the discharge of interest on a tax debt - half of the focus of the original question - in Miller v. United States, 363 F.3d 999 (9th Cir. 2004) (a personal Chapter 11 case, so 1141(d)(2)'s reference to 523(a) was implicated) the Ninth Circuit held that postpetition interest on a tax debt was excepted from discharge under 523(a)(1)(A), and would therefore be non-dischargeable under either 727 of 1328(b). See also Ward v. Bd. of Equalization of Cal. (In re Artisan Woodworkers), 204 F.3d 888 (9th Cir. 2000) (postpetition interest on nondischargeable tax debt under 523 (a)(1)(A) was nondischargeable).
Finally, you may find it helpful to read Peter Lively's post of January 27, in which he provides a detailed analysis on the question of the discharge of tax penalties. My one addition to his discussion is: In a 1328(b) discharge - unlike a 1328(a) discharge - since all of the exceptions of 523(a) apply (and in particular, 523(a)(1)(A)), it follows that all of 507(a)(8) applies. Thus, 507(a)(8)(G)'s tax penalties would not be dischargeable under 1328(b). However, as Peter argued, they probably would be discharged under 1328(a); meaning that the Debtor would have to successfully complete the plan to discharge the tax penalties.
Peter also took the position that tax interest is inextricably tied to the underlying tax, so if the tax itself is nondischargeable, then the interest is too. The cases cited above dealt with postpetition, as opposed to prepetition, interest. While I agree that prepetition interest is part and parcel with the scheduled tax debt, postpetition tax interest may be dischargeable under 1328(a) - though as the cases establish, since it is excluded under 523(a)(1)(A) it is most definitely not dischargeable under 1328(b).
Best regards,
Nick
Nicholas Gebelt, Ph.D., J.D.
Law Offices of Nicholas Gebelt
15150 Hornell Street
Whittier, CA 90604
Phone: 562.777.9159
FAX: 562.946.1365
Email:
ngebelt@goodbye2debt.com
Web:
www.goodbye2debt.com
Confidentiality Note: This e-mail is intended only for the person or entity to which it is addressed and may contain information that is privileged, confidential, or otherwise protected from disclosure. Dissemination, distribution, or copying of this e-mail or the information herein by anyone other than the intended recipient, or an employee or agent responsible for delivering the message to the intended recipient, is prohibited. If you have received this e-mail in error, please notify us immediately at 562.777.9159 or e-mail
info@goodbye2debt.com and destroy the original message and all copies.
Representation Note: If you have not signed a contract of representation, the Law Offices of Nicholas Gebelt do not represent you, and this email does not contain any legal advice for you.
----- Original Message -----
To:
cdcbaa@yahoogroups.com
Cc:
Robert90701@aol.com
Sent: Sunday, February 14, 2010 12:14 PM
Subject: Re: [cdcbaa] Tax Question
Dear Jeff:
1328(a) discharges all debts provided for by the plan and
1328(b)(2) which covers exceptions specifically omits references to 523(a)(7) which
concerns fines and penalties to a government unit so they are probably dischargeable.
There is an old case that may be applicable indirectly.
Each penalty needs to be analyzed and may be dischargeable depending on how they
are classified such as nonpecuniary or not,
Interest is a whole other thing and since it is pecuniary in nature, it is probably
not dischargeable.
No definite answer can be reached without research, shepardizing, etc.
and even then there are no guarantees.
Good Luck starts with a strategy and a plan. Form a strategic alliance with
Robert J. Suhajda, MS,CPA
17721 Norwalk Blvd. #43
Artesia, CA 90701
562-924-8922
Income Tax for Attorneys, Bankruptcy, IRS representation,
Fiduciary income tax returns, Estate and Gift tax returns,
Trust Protector, Independent Trustee, Court Accountings
In a message dated 1/5/2010 3:43:17 P.M. Pacific Standard Time,
jsmith@cgsattys.com writes:
Does the general Rule that "if the taxes are not dischargeable then the penalties and interest are not dischargeable" have any exceptions? A little voice in my head is buzzing around that there is some wiggle room in a Chapter 13 or a Chapter 11 that the penalties and/or interest may be discharged in certain circumstances.
Or is that buzzing just the hangover from New Years?
Jeff Smith
The post was migrated from Yahoo.