No, not the Mel Gibson-Sigourney Weaver 1982 epic. Rather this is a caution to those who petition Tax Court and Bankruptcy Court for the same year.

And who better to expose this trap for the unwary but The Great Dissenter, a/k/a The Judge Who Writes Like a Human Being, s/a/k/a as the Inveterate, Indefatigable, Illustrious, Implacable, Imperturbable Foe of the Partitive Genitive, and Old China Hand, Judge Mark V. Holmes?

He designates this one, Robert Roseberry & Della Roseberry, Docket No. 261-14S, filed 8/31/15. And thanks, Judge Holmes, for sparing me from wading through eight (count ‘em, eight) pages of orders while I’m vacationing at Fort Ticonderoga in The Empire State.

Rob & Del petition Tax Court for two years and file chapter. They were heading to trial in Birmingham, AL, when IRS’s counsel woke up and invoked the automatic stay in 11 USC§362. Rob & Del didn’t object, so Judge Holmes dismissed for want of jurisdiction.

But consciousness, once awakened, is a difficult thing to restore to somnolence. One of the years that Rob & Del petitioned to Tax Court was the very year in which they filed chapter.

IRS’s counsel, wide awake now, moves to restore the case for the year in which Rob & Del filed chapter.

“One of the deficiencies that the Roseberrys challenged was for the 2011 tax year. For them, that tax year ended at the end of 2011, but they filed their bankruptcy case in February 2011. Ever since 2005, the Bankruptcy Code has not extended the protection of the automatic stay to tax years that haven’t ended before a bankruptcy petition is filed. See People Place Auto Hand Carwash, LLC v. Commissioner, 126 T.C. 359, 362 n.6 (2006). Neither party nor the Court noticed this before dismissing the Roseberrys’ entire case, but it’s not too late to fix the mistake.” Order, at p. 1.

Judge Holmes always finds something new to learn. See my blogpost “Always Something to Learn,” 10/24/14.

Note that Ch J Michael B. (“Iron Mike”) Thornton, who wrote the People Place opinion, stated in that footnote 6 that the 2005 Bankruptcy Code amendment didn’t apply in People Place, because the People Place petitioners filed chapter prior to the effective date of the amendment to the Bankruptcy Code. So maybe it’s dicta, but so what?

The amendment does apply to Rob & Del, so Judge Holmes vacates his earlier dismissal, and reinstates it only as to the 2010 tax year, the year prior to the chapter filing.

So it’s “game on” as to the 2011 tax year.

Takeaway– Watch those petitions, practitioner.