§727

section 727 relieves the debtor of personal (or in personam) liability . * * * Such a 'discharge, however, does not protect the debtor's assets if those assets were subject to a Federal tax lien that was properly filed pursuant to section 6323 before the bankruptcy petition wa s filed .'See also Iannone v . Commissioner , 122-T .C. 287, 292-293 (20

Petitioner received a discharge by order of the bankruptcy court dated July 27, 2004, stating: "IT IS ORDERED: The debtor is granted a discharge under section 727 of title 11, United States Code." 3 Schedule F listed: "Ms.

§ 727 (discharge order) for petitioners. The discharge order outlined the consequences of a bankruptcy discharge in a chapter 7 case. It stated that “no one may make any attempt to collect a discharged debt from the debtors personally.” It further explained that “a creditor with a lien may enforce a claim against the debtors’ property subject to th

See 11 U.S.C. § 362(c)(2)(C). Respondent filed the Motion for Summary Judgment, and peti- tioners responded. In petitioners’ Response they acknowledge that SO2 offered them a PPIA calling for monthly payments of $62. But they con- tend that they “cannot afford to pay this amount as it would create an undue hardship.” Discussion A. Summary Ju

727(a)(10) (2012). In April 2019 the bankruptcy court issued a final judgment in the adversary proceeding, which incorporated by reference the settlement agreement. In June 2020 the bankruptcytrustee reported to the bankruptcy court that the Drinkwater property had been sold for $765,000. The trustee subsequently mailed petitioner a check for

727(b) (2012); Bussell, 130 T.C. at 234. Section 523 excepts from discharge any tax: (i) for which the due date (including extensions) for the relevant tax return was within three years before the filing ofthe bankruptcypetition (three-year rule), -12- [*12] (ii) for which the relevant tax return was not timely filed and was filed within two

727 (2012), and the case was closed on November 22, 2013. On April 2, 2014, respondent filed a motion for summaryjudgment, asserting that (1) this Court did not havejurisdiction to determine whether petitioner's liability for his 2009 deficiency was discharged in bankruptcy; (2) the 2009 tax liability was not determined in the bankruptcy court

On March 31, 2014, as a result ofthe bankruptcy court's discharge, respondent cleared petitioner Vincent Craven, Jr.'s, assessed income (continued...) - 6 - [*6] On May 28, 2015, Settlement Officer Lisa Wold (SO Wold) sent petitioners a letter scheduling a supplemental conference on June 24, 2015. The letter requested that petitioners pr

On November 22 and December 2, 2013, the parties informed this Court ofpetitioner's discharge and the closing ofpetitioner's bankruptcy case. Respondent and petitioner filed their motions for summaryjudgment on April 2 and April 10, 2014, respectively. Respondent contends that this Court does not havejurisdiction to determine wheth

727 (2012), but it does not appear that the 2007- 2010 tax liabilities at issue here were discharged. 2 Neilson v. Commissioner, 94 T.C. 1, 9 (1990) (Tax Court lacksjurisdiction to decide whether a taxpayer's deficiencies were discharged in a bankruptcyproceeding). In any event, neither party contends that the bankruptcy stay or petitioner's d

- 7 - discharge under section 727 ofthe Bankruptcy Code and, by order dated May 20, 2013, closed the bankruptcy case.

amounts apply in this case. IX. Deficiency Notice On March 31, 2011, respondentmailed to petitioners the deficiency notice underlying this proceeding. 50n December 1, 2010, the bankruptcy court issued an order granting petitioners a discharge under sec. 727 ofthe Bankruptcy Code. -10- [*10] Discussion I. Overview Petitioners make two arguments in their opening briefas to the issues at hand. We limit our analysis to those arguments. See, e.g., Mendes v. Commissioner, 121 T.C. 308, 312-313 (2003)

727 (2012) and closed the bankruptcy case. Discussion Title 11 ofthe United States Code provides uniform procedures designed to promote the effective rehabilitation ofthe bankrupt debtor and the equitable distribution ofher assets among her creditors. See Prevo v. Commissioner, 123 ¹ Unless otherwise indicated, section references are to the In

Petitioners received a discharge ui der Bankruptcy Code section 727 on December 3, 2009, and the chapter 7 bankruptcy case was closed on December 15, 2009.

727(a) (2006) provides that a debtor who files a bankruptcy petition under chapter 7 ofthe Bankruptcy Code is to be granted a discharge unless one ofthe grounds for denial ofdischarge enumerated in that chapter exists.

However, that debtor is not discharged from claims for income tax due for a tax year for which the due date for the return is within three years ofthe filing ofthe petition in bankruptcy. Id. secs. 523(a)(1)(A), 507(a)(8); see also Severo v. Commissioner, 129 T.C. 160, 165-166 (2007), aff'd, 586 F.3d 1213 (9th Cir. 2009). Petiti

However, that debtor is not discharged from claims for income taxes due for a tax year Sor which the due date I for the return is within 3 years of the fil ng of the petition in bankruptcy. 11-U.S.C. secs. 523(a) (1) (A), 07(a) (8) (2006); see also Severo v. Commissioner, 129 T.C. 160, 165-166 (2007), affd. 586 F.3d 1213 (9th Ci

727(b), the criminal-forfeiture proceeding against Charles Penland resulted i no order discharging his debts or those. of his wife. G. The Receiver Appointed To Manage Penco's Assets Did Not Assume Mary Penland's. Income-Tax Liabilities. Penland also sserts that th receiver appointed by the district court to manage Penco's. assets is liable fo

524(a) provides that such a discharge: (1) voids any judgment at any time sobtained, to the extent that such judgment is a determination of the personal liability of the debtor with respect to any debt discharged under section 727, 944, 1141, 1228, or l'328 of this title, whether or not discharge of such debt is waived; (2) operates as an injunction against the commencement or continuation of an action * * * to collect, recover or offset any such debt as a personal liabŠlity of the debtor, wheth

Exceptions to discharge (a) .A discharge under section 727, 1141-, 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt-- (7) to the extent such debt is for a fine, penalty, or forfeiture payable to and for the benefit.

section 523(a) (2006) : (a) A discharge under section 727, 1141, 1228(a), .

727(b) (2006) ; United States v. Hatton, 220 F.3d 1057, 1059-1060 (9th Cir . 2000) . However, an individual debtor is not to be discharged in a bankruptcy proceeding from certain specified categories of debts . 11 U .S .C . sec. 523(a) ; Washington v. Commissioner , 120 T.C . 114, 121 (2003) . The first such category that is specifically excep

section 727 discharges a debtor from personal liability for all debts incurred before the bankruptcy petition was filed. See United States v. Hatton, 220 F.3d 1057, 1059-1060 (9th Cir. 2000). Title 11 U.S.C. section 523(a) sets forth several exceptions to discharge under 11 U.S.C. section 727 and provides in pertinent part: § 523. Exceptions to dis

(a) A discharge under section 727 * * * of this title does not discharge an individual debtor from any debt-- (1) for a tax * * * (A) of the kind and for the periods specified in section * * * 507(a)(7) of this title, whether or not a claim for such tax was filed or allowed * * * Under the cross-referenced Bankruptcy Code section 507(a)(7)(A)(i), Federal income taxes ar

Mrs . Wright's chapter 13 bankruptcy was closed on January 31, 2005 . The above-mentioned notice of deficiency was issued to petitioners on November 23, 2004 . Petitioners filed a timely petition disputing the deficiencies, additions to tax, and penalties, on February 22, 2005 .17 As the petition was timely filed, and was not f

727, by the U.S. Bankruptcy Court for the Northern District of Ohio. Respondent has conceded that he will no longer attempt to collect the discharged liability. - 4 - liability for 1997, that her wages were being garnished to pay the 1997 tax liability, and that petitioner and Mr. Crouch could not pay the amounts due for 1998 and 1999. On or

Petitioner's Individual Retirement Accoun t On the date she filed her chapter 7 bankruptcy petition, petitioner owned an individual retirement account (IRA) worth $142,545 .90 . Respondent's Collection Effort s On December 4, 2003, Revenue Officer Cindy Alexander (Ms . Alexander) was assigned to investigate enforcement of the F

727(b) (2000); Swanson v. Commissioner, supra at 120. Consequently, the 2004 supplemental determination's conclusion that the liabilities at issue were not discharged was not an abuse of discretion. Notice and Demand In the petition, petitioner claimed that he had not received notice and demand for payment for any of the liabilities at issue,

The United States Bankruptcy Court for the District of Colorado (Bankruptcy court) granted petitioner a discharge under section 727 of title 11, United States Code (the Bankruptcy Code).

That order stated as follows: It appearing that the debtor(s) is/are entitled to a discharge, IT IS ORDERED: The debtor(s) is/are granted a discharge under section 727 of title 11, United States Code * * *.

section 727(b) (2000) provides that, with exceptions not here relevant, the effect of a discharge by a bankruptcy court is to discharge the debtor “from all debts that arose before the date of the order for relief under this chapter * * * whether or not a proof of claim based on any such debt * * * is filed under section 501 of this title”. Accordi

The order confirming the plan proclaimed: that, except as provided in the Plan, the individual Debtors are discharged from any debt that arose before - 9 - the date of confirmation of the Plan, except any debts excepted from discharge under § 523 of the Bankruptcy Code, and except if the Debtors would be denied a discharge under § 727(a) of a chapter 7 case; * * * On May 18, 1995, the bankruptcy court issued its final decree and closed the bankruptcy case.

Exceptions to discharge (a) A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title [title 11] does not discharge an individual debtor from any debt–- (1) for a tax or a customs duty– (A) of the kind and for the periods specified in section 507(a)(2) or 507(a)(8) of this title, whether or not a claim for such tax was filed or allowed; (B) with respect to which a return,

Exceptions to discharge (a) A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title [title 11] does not discharge an individual debtor from any debt-– (1) for a tax or a customs duty– - 17 - (A) of the kind and for the periods specified in section 507(a)(2) or 507(a)(8) of this title, whether or not a claim for such tax was filed or allowed; (B) with respect to which a

The return assessment was abated shortly after issuance of the discharge order. On June 19, 1996, petitioners filed a petition with this Court with respect to the notice of deficiency for 1991. 3The parties have stipulated that the bankruptcy petition was filed on Mar. 10, 1995, although the bankruptcy court’s discharge order indic

In this case, petitioner initially contended that the income taxes at issue were discharged in the bankruptcy case. Petitioner conceded before trial that her joint and several income tax liabilities for the years 1980 through 1983 were excepted from bankruptcy discharge pursuant to 11 U.S.C. sec. 523(a)(1)(C). Payment of Tax Deficiencies

Petitioner's Hearing and the Notice of Determination At the section 6320/6330 hearing on November 29, 2001, petitioner asserted that the chapter 7 bankruptcy discharge absolved her of the 1995 and 1996 income tax liabilities. Petitioner did not present evidence of the alleged "financial hardship" or of the "discrepancies" in the li

727, which served to terminate the automatic stay. See 11 U.S.C. sec. 362(c)(2)(C). Accordingly, on July 8, 2003, this Court ordered that the stay of proceedings in this case is lifted. Rule 34(b)(4) provides that a petition filed in this Court shall contain clear and concise assignments of each and every error which petitioners allege to have

In his Schedule E, Creditors Holding Unsecured Priority Claims, petitioner listed his liability to respondent as $10,9603 plus penalties and interest for the taxable years 1992, 1993, and 1994.4 On November 6, 2001, the bankruptcy court issued an order stating that petitioner “is/are granted a discharge under section 727 of Title 11, United States Code (the Bankruptcy Code).” 2 At the time he filed the petition, petitioner resided in Sausalito, California.

2609, are de- scribed in the accompanying Senate report as “the heart of the fresh start provisions of the bankruptcy law”. S. Rept. 95-989, at 7, 98 (1978). - 24 - Congress also adopted another method in the 1978 Bankruptcy Reform Act for providing a “fresh start” to debtors coming out of bankruptcy, namely, allowing debtors in

(a) A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt-- (1) for a tax or customs duty-- (A) of the kind and for the periods specified in section 507(a)(2) or 507(a)(8)[1] of this title, whether or not a claim for such tax was filed or allowed; * * * 1 Sec.

727(a)(1) (1994)(effective for the years at issue). In that regard, there are procedures which provide the debtor to an absolute right to convert the case to a case under ch. 11. 11 U.S.C. sec. 706(a) (1994). - 18 - there must be an identifying event or other evidence to show that a debt has, in fact, been discharged. See, e.g., United States

n acts intended to hinder, delay, or defraud his creditors. A trial in the adversary proceeding was held in the United States Bankruptcy Court for the District of New Hampshire on January 11, 12, and 3 11 U.S.C. sec. 727(a) (1994) provides, in part: Sec. 727. Discharge (a) The court shall grant the debtor a discharge, unless-- * * * * * * * (3) the debtor has concealed, destroyed, mutilated, falsified, or failed to keep or preserve any recorded information, including books, documents, records, a

On Dec. 12, 1994, Ps filed a petition for redetermination with this Court. On Jan. 23, 1995, the bankruptcy court entered an order granting Ps' motion for relief from judgment and vacating its order entered Nov. 1, 1994. On July 21, 1995, this Court issued an order directing the parties to show cause why this case should not be dis

§727 are determined non-dischargeable in this case and any other proceeding currently pending or to be filed by the Debtors. This Judgment should be considered res judicata to any future filing by either Chan Quang Kieu or Quynh Kieu, the Debtors herein. [Emphasis added.] There was no stay, and the order contains no mention of the status of the aut