This case is pending on the motion of the United States of America for relief from stay. The U. S. seeks stay relief so that it may exercise a right of setoff.

FINDINGS OF FACT:

At the time the debtors filed their joint petition for relief under chapter 7 of the Bankruptcy Code on February 5, 1996, the debtor Danny L. Bowling was indebted to The Army and Air Force Exchange Service. While Mr. Bowling was serving in the U. S. Air Force he had a charge account at the Post Exchange (PX) on a military base.

The Army and Air Force Exchange Service is a joint military command of the U. S. Army and U. S. Air Force. Its primary mission is to provide merchandise and services to military personnel and their families, and to generate reasonable earnings to supplement Congressional appropriations for military morale, welfare, and recreation programs.

The AAFES DPP program is an in-house credit plan that provides the military and authorized family members affordable credit at PX facilities.

On or about December 15, 1995 the AAFES IRS Refund Offset Section, acting pursuant to Department of Treasury guidelines, submitted Mr. Bowling's delinquent charge account debt to the IRS for tax refund offset. At that time the debt was $2,049.43. This was also the amount of the debt on the date of bankruptcy. On February 26, 1996, subsequent to bankruptcy, the debt was offset by a tax refund in the amount of $510.24 owed to the debtors by the IRS for the taxable year ending December 31, 1995. The present balance due on the charge account debt is $1,539.29.

The IRS's motion for relief from stay is in effect a request for court approval of an offset that occurred postpetition in violation of the automatic stay.

Since this offset occurred postpetition without court approval it may be a transfer that is avoidable by the trustee under 11 U.S.C. § 549.

CONCLUSIONS OF LAW:

There is developing authority for the view that although the United States Government acts through a myriad of governmental entities, as in this instance through The Army and Air Force Exchange Service and the IRS, the Government is nevertheless a unitary creditor for determining the right of setoff. In re Turner, 84 F.3d 1294 (10th Cir. 1996); In re Hal, Inc., 196 B.R. 159 (9th Cir. BAP 1996). These cases instruct that even though the debtors herein do not owe the IRS, rather the IRS owes them $510.24, the IRS may nevertheless confiscate the debtors' tax refund for application to a debt which Mr. Bowling owes to The Army and Air Force Exchange Service. Mutuality is said to exist for the purposes of set off because the Government is a unitary creditor with the result that a sum owed to one governmental agency is really owed to the government in general. This view has been rejected by some bankruptcy courts. See In re Lopes, 197 B.R. 15 (Bankr. D. R.I. 1996) and cases cited therein.

In any event it is not clear from the record in this case whether Mrs. Bowling owes the PX debt or whether part of the tax refund in question belongs to her.

Also, it is not clear whether the violation of the automatic stay in this instance by the "Government," as a unitary creditor, was negligent or deliberate, with the result that set off should be denied as a form of sanction.

Also, the Government appears to have conceded in the Turner case, at footnote 1, that the Government may not be a unitary creditor when the agency that is owed is acting in a private capacity, as in this instance where PX's are apparently operated for profit.

For the foregoing reasons the motion for relief from stay is denied pending further orders of the court.

Dated:

By the court -

__________________________

JOE LEE

CHIEF JUDGE

Copies to:

David E. Middleton, Esq., Assistant U. S. Attorney

Robert J. Brown, Esq., Trustee

J. James Rogan, Esq., Attorney for debtor