The failure to redesignate this cross reference in the 1984 amendments was merely an oversight, and the proper reference in section 523(a)(1) should be to section 507(a)(7). Easton v. United States (In re Easton), 59 B.R. 714, 716 n. 1 (Bankr.C.D.Ill. 1986).Edwards v. I.R.S. (In re Edwards), 74 B.R. 661, 662-63 (Bankr.N.D.Ohio 1987). (A) a tax on or measured by income or gross receipts —
Therefore, parts (i)-(iii) of § 507(a)(7)(A) are alternative grounds for priority treatment of claims falling within subparagraph (A) of § 507(a)(7). Debtor contends, however, that the cases of In re Doss, 42 B.R. 749 (Bankr.E.D.Ark.1984) and In re Edwards, 74 B.R. 661 (Bankr.N.D.Ohio 1987) mandate a different result. In Doss, at issue was the dischargeability and priority of unassessed tax liabilities for which debtor had made an untimely filing [after the date on which the return was last due] more than two years prior to debtor's bankruptcy filing.
See, e.g., In re Treister, 52 B.R. 735, 738 n. 2 (Bankr. S.D.N.Y. 1985) ("The debtor's reliance on In re Doss . . . is misplaced since there the tax returns were not timely filed); In re Longley 66 B.R. 237, 241 (Bankr. N.D. Ohio 1986) (distinguishing Doss because debtors in Longley did not file a late tax return); In re Edwards, 74 B.R. 661, 664 (Bankr. N.D. Ohio 1987) (stating that "the Doss decision is distinguishable since the tax claim at issue arose from an untimely filed tax return; the tax return in the instant case was timely filed"); In re Holden, No. 90-01314-13, 1991 Bankr. LEXIS 187, at *3 (Bankr. D. Idaho Feb. 4, 1991) ("The Doss case is dissimilar to the instant case since the taxes at issue do not meet the requirements for Section 523(a)(1)(B)(ii) and thus are not contained in the exclusion contained in Section 507(a)(7)(A)(iii)); see also In re Etheridge, 91 B.R. 842, 845 (Bankr. C.D.Ill. 1988), aff'd sub nom. Etheridge v. Illinois, 127 B.R. 421 (C.D. Ill. 1989) ("In the case before this Court, although Section 523(a)(1)(B)(ii) is involved, Section 507(a)(7)(A)(iii) is not and this court does not believe that the statutory interpretation of Doss can be extended to this case). Doss nonetheless raises questions about the proper construction of section 507(a)(7)(A)(iii), questions echoed by the debtors appeal. Although the Doss court pu
While that is true, the parties have not cited the court to any binding authority on this issue, and the court's own research has not disclosed any. It is worth noting that the cases the Division of Tax relies on are also outside this jurisdiction and are both more than twenty-five years old. One of the cases the Division of Tax relies on is In re Edwards, 74 B.R. 661 (Bankr.N.D. Ohio 1987). That case was decided under § 523(a)(1)(A) and both its facts and reasoning have no bearing on this issue.The Division of Tax relies on Wood for the proposition that “11 U.S.C. § 523(a)(1)(B)(ii) is the product of Congress' balancing of competing interests between a fresh start for debtors and the importance of paying taxes to State and Federal government.” That statement is not wholly accurate.
In the instant case, however, the State argues that it is not necessary to proceed to an analysis under § 523(a)(1)(B)(ii) (late filing) because the taxes at issue are less than three years old and are entitled to priority under § 507; thus they are excepted from discharge under § 523(a)(1)(A). The Debtors also rely on Edwards v. IRS, 74 B.R. 661 (Bankr.N.D.Ohio 1987), in which the IRS conducted an audit of the debtor's timely 1982 tax returns approximately three years later, and the debtor executed a consent to extend the time to assess the 1982 taxes until the end of 1986. The debtor filed for bankruptcy in July of 1986.