Attorney-at-Law

JUDGE GUSTAFSON’S CONUNDRUMS – PART DEUX

In Uncategorized on 11/10/2015 at 16:25

See my blogpost “Judge Gustafson’s Conundrums,” 6/2/15.

We know that Judge David Gustafson is obliging as can be. He instructs, will make housecalls to jails, and generally helps the stumbling pro se wherever he can. But his isn’t omniscient, and is the first to tell us so.

Here he is in Bradford G. Brown, Docket No. 28708-14L, filed 11/10/15.

Brad has lots of trouble. He’s bankrupt, and wanted to contest his tax liability, but was in the slammer at the time. In the meantime, the Ch 7 Trustee made a deal with the IRS that cut Brad’s liabilities, but Brad thought he could do better.

IRS wants summary J on Brad’s liabilities, claiming the bankruptcy deal between the 7 Trustee and IRS precludes Brad.

Brad claims “…the settlement letter indicated that he would have a final opportunity to submit documentation to reduce his tax liability at the hearing on the chapter 7 trustee’s motion to compromise controversy. He contends that he was not afforded that final opportunity because he was incarcerated at the time of the hearing on the motion to compromise controversy and that respondent has not located the bankruptcy court hearing transcripts that would show what the bankruptcy court decided or that he was given a final opportunity to present his documentation.” Order, at pp. 1-2.

Judge Gustafson wisely steps to the side. “This case involves bankruptcy issues as to which the undersigned judge is not expert, and we will order the parties to address several questions about that motion.” Order, at p. 1.

When Judge Gustafson gets a chance to ask questions, stand back, counselor. You’re in for an old-time South Carolina hayride (Judge Gustafson hails from Palmettoland).

So here goes.

“(1) What is the authority for the proposition that the bankruptcy settlement between the chapter 7 trustee and the IRS is binding on Mr. Brown?

(2) If the bankruptcy settlement is binding on Mr. Brown and the IRS, why has the IRS not abated that portion of Mr. Brown’s liability that exceeds the agreed-upon settlement amount?

(3) Does section 6330(c)(2)(B) preclude a liability challenge in this CDP proceeding if the Court finds that Mr. Brown’s incarceration prevented him from appearing at the hearing?

(4) Why has the IRS not credited the amounts that have already been paid by Mr. Brown’s bankruptcy estate against his liability as reflected on his account transcripts?

(5) Is the portion of Mr. Brown’s liability that was not satisfied through the bankruptcy proceeding (i.e., the unpaid general unsecured claim of $1,133,780.18) subject to a bankruptcy discharge by operation of 11 U.S.C. section 727?

(6) If the unpaid portion of Mr. Brown’s liability was not subject to a bankruptcy discharge, under what theory was it excepted from discharge under 11 U.S.C. section 523?” Order, at pp. 3-4.

Let’s see how IRS’ counsel navigates this one.

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