UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF KENTUCKY
TERRY HENDERSON CASE NO. 94-21278
MEMORANDUM OPINION AND ORDER
This Chapter 13 case is before the Court upon the Motion by creditor, Internal Revenue Service, United States of America, to dismiss the case. The Motion was heard on April 2, 1996 and the debtor has filed his Response to the Motion.
The sum and substance of the controversy involves taxes for calendar year 1994 in the amount claimed by the United States of $16,964 all of which remain unpaid. That is the same year in which, on November 15, the debtor filed this Chapter 13 proceeding. The controversy involved the debtor's contention that the plan addresses and includes the 1994 taxes of the debtor.
The first issue involves when a claim accrues for purposes of inclusion in the estate. The debtor's tax return for the taxes herein involved, would not have been due until the tax filing deadline, April 17, 1995. The United States contends that, as of November 15, 1994, when the petition was filed, the United States had no claim for these taxes and, thus, it is a post-petition debt. In this contention, the United States is correct. The deadline for filing the tax return involved is the date upon which the claim arose. United States v. Ripley, 926 F.2d 440 (5th Cir. 1991); In re Matravers, 149 B.R. 204 (Bankr.D.Utah 1993); In re Owens, 67 B.R. 418 (Bankr.E.D.Pa. 1986). Therefore the amount due for debtor's 1994 taxes is a post-petition claim.
Pursuant to 11 U.S.C.'1305, the United States may elect to file a claim for taxes accruing post-petition, but it has not chosen to do so in this proceeding. The filing of such a claim is voluntary on the part of the claimant and it does not appear that the claimant can be compelled to file a claim or that the debtor can file a claim for the claimant. See Collier on Bankruptcy, 15th Edition '1305.01, et. seq. Further, the debtor cannot discharge the liability merely by providing for the liability in the plan where the creditor does not choose to file a post-petition claim. In re Hester, 63 B.R. 607 (Bankr.E.D.Tenn. 1986).
Based on the above, it is clear to the Court that the terms of the Bankruptcy Code present a problem for the debtor who owes tax debts for the year during which the debtor files a Chapter 13 proceeding. If the amount of those tax debts is large, it may present a substantial problem for the debtor if the United States elects not to have them included in the estate. The debtor does not have the option, as in cases under Chapter 7 and 11, to divide the taxable year to end a reporting period at the date of filing of the petition pursuant to 26 U.S.C.'1398. See In re Mirman, 98 B.R. 742 (Bankr.E.D.Va. 1989) for a discussion of such elections.
With respect to the present case, since the United States cannot be compelled to file a claim nor can the debtor file a claim for the United States, the Court must determine whether the Motion to Dismiss should be sustained upon the present record. The amount of the claim in this case, $16,964 is a sizeable claim under the circumstances of the present debtor. The problem here was not caused by the United States in any regard. The question before the Court involves weighing whether or not the case should be dismissed, as opposed to allowing the case to continue with the debtor to address the tax liability as best he can. An examination of these issues would involve weighing the effect of the automatic stay pursuant to'362 of the Bankruptcy Code and, in particular, what remedies the United States might have as against wages and other property and whether such wages and other property is property of the estate and, thus, subject to the terms of the automatic stay herein. The parties have not briefed these issues, and the Court is not prepared to address them under the circumstances of this case. It does appear that the debtor has financial difficulties, i.e. the tax claim herein, which are not addressed, nor capable of being addressed without the consent of the United States, in this proceeding. The amount of those liabilities is substantial. For that reason, the Court believes that the Motion of the United States is well taken. The debtor will, of course, have the option of filing a subsequent Chapter 13 petition to address not only those debts which are addressed in the present case but also the tax debt asserted by the United States for 1994.
It is therefore ORDERED that the Motion of the United States be, and the same hereby is, SUSTAINED, and the within proceeding be DISMISSED.
Dated this ______ day of ________________, 1996.
BY THE COURT
David Middleton, Esq.
Michael L. Baker, Esq.
Sidney N. White, Esq.