The Ninth Circuit affirmed the opinion of the bankruptcy appellate panel finding that a state-mandated notification to the state taxing authority of a change in the taxpayer’s federal taxes is a “return, or equivalent report or notice,” which, if not filed by the taxpayer, renders the state tax debt nondischargeable under section 523(a)(1)(B). Berkovich v. Cal. Franchise Tax Bd., No 20-60046 (9th Cir. Oct. 14, 2021) (see discussion of In re Berkovich, 619 B.R. 397 (B.A.P. 9th Cir. 2020) here).

The Chapter 11 debtor could not modify her residential mortgage even though much of the property securing the mortgage was used for income-producing purposes. Lee v. U.S. Nat’l Bank Ass’n, No. 20-222 (M.D. Ga. Oct. 4, 2021).

Finding that its “task is to interpret the Bankruptcy Code, ‘not to balance the equities,’” the Ninth Circuit held that section “554(c) requires property to be disclosed on a literal schedule, and thus that, absent Trustee or court action, property disclosed only on a statement (e.g., the Statement of Financial Affairs) cannot be abandoned under § 554(c).” Stevens v. Whitmore, No. 20-60044 (9th Cir. Oct. 19, 2021).

A tax return filed four years after it was due and one year after the IRS completed its own independent tax assessment is not dischargeable under section 523(a) because it does not meet the “honest and reasonable” standard set forth in the Beard test for what constitutes a “return.”  IRS v. Starling, Nos. 20-7478, 20-7954 (S.D.N.Y. Sept. 16, 2021).

Each year, millions of individuals and families across the country struggle to pay their bills. Often financial distress follows on the heels of other unanticipated events such as job loss, divorce, substantial out-of-pocket medical expenses and natural disasters. Bankruptcy may provide these debtors with the opportunity for a fresh start. The Bankruptcy Code grants financially distressed debtors certain rights that are critical to the proper functioning of the bankruptcy system as a whole. However, bankruptcy debtors, lacking both financial resources and exposure to the bankruptcy system, often do not have the ability to protect the integrity of the bankruptcy system and preserve the bankruptcy rights of consumer debtors more generally. The National Consumer Bankruptcy Rights Center (NCBRC) was created to fill that vacuum.

One of the most popular features of NACBA membership is the ability for members to pose bankruptcy questions and get real time responses from their colleagues around the country. NACBA's Listserv, called NACBA Connect, gives participants the ability to post both the easy and hard questions to some of the best consumer bankruptcy attorneys in the nation. NACBA Connect also functions as a virtual community of people doing the same type of work and is a boon for the new practitioner as well as the most sophisticated consumer bankruptcy attorneys. Visit NACBA.org to learn more.