Case Summaries — Recent Appellate Decisions

Reynolds v. IRS, Civ. Action No. 13-10788-NMG (D. Mass. Jan. 15, 2014)

A pro se Chapter 13 debtor filed an adversary proceeding seeking discharge of income taxes owed for 2000 through 2003 that she had refused to pay.  (The IRS had characterized the debtor as a “tax protester.”)  The Bankruptcy Court had denied the IRS’s motion for summary judgment reasoning that a fact finder could plausibly find that the debtor lacked the requisite mental state for a “willful” attempt to evade the tax under section 523(a)(1)(C).  As a threshold matter, the District Court granted leave to hear the interlocutory appeal under 28 U.S.C. § 158(a)(3) (though the court mistakenly references 18 U.S.C. § 158(a)(3) throughout).  It then went on to reverse the Bankruptcy Court and find that taxes for all of the tax years were nondischargeable pursuant to section 523(a)(1)(C) because the debtor had failed to refute the IRS’s evidence demonstrating that she had willfully attempted to evade the taxes.  The District Court reached this conclusion with respect to all three tax years for which the debtor owed taxes, even though the debtor had filed a return for one of the years.

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