Taxes, Bankruptcy, and Lazarus Problem

Authors

Alan L. Feld, Boston Univeristy School of LawFollow

Document Type

Article

Publication Date

7-3-2000

ISSN

1048-3306

Publisher

Tax Analysts

Language

en-US

Abstract

[1] The Ninth Circuit recently barred the IRS from its day in court in a personal bankruptcy proceeding. ¹ The issue in the case concerned the effect, in a chapter 13 bankruptcy proceeding, of a dismissal order followed later by an order reinstating the case. The Ninth Circuit counted the number of days between the dismissal and the reinstatement against the government and ordered the IRS proof of claim dismissed as untimely. As a result, the tax owing became subject to discharge in the bankruptcy without taxpayer payment.

[2] The result defeats the intent of the statute and creates waste and potential unfair results whenever a bankruptcy court dismisses a chapter 13 case. A similar legal framework applies in chapter 7 cases, although with less drastic consequences. ² The Ninth Circuit's error lies in its miscalculation of the time for filing under the statute when a dead case, Lazarus-like, returns to life.

Recommended Citation

Alan L. Feld, Taxes, Bankruptcy, and Lazarus Problem , in 88 Tax Notes 129 (2000).
Available at: https://scholarship.law.bu.edu/faculty_scholarship/2966