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.
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 re Hosack, 282 Fed.Appx. at 315. As stated in Edwards v. Internal Revenue Serv. (In re Edwards), 74 B.R. 661, 666 (Bankr.N.D.Ohio 1987), “a tax claim which arises from a timely filed tax return filed more than two years before the petition date, or even more than three years before the petition date, is a nondischargeable tax claim, entitled to priority treatment, if the tax is still assessable as of the petition date.” Accordingly, the Court finds that the IRS is entitled to summary judgment on this issue.
In re Hosack, 282 F.App'x at 315. As stated in Edwards v. Internal Revenue Serv. (In re Edwards), 74 B.R. 661, 666 (Bankr. N.D. Ohio 1987), "a tax claim which arises from a timely filed tax return filed more than two years before the petition date, or even more than three years before the petition date, is a nondischargeable tax claim, entitled to priority treatment, if the tax is still assessable as of the petition date." Accordingly, the Court finds that the IRS is entitled to summary judgment on this issue.
In balancing the interests of the general creditors, the debtor and the tax collector, the treatment of tax claims was designed to give "governmental units a priority claim on assets of the debtor's estate for certain taxes which have not grown so `stale' as to constitute an unjustifiable burden on general unsecured creditors (who may have extended new credit to the debtor since the tax liability arose)."In re Edwards, 74 B.R. 661, 665 (Bankr. N.D.Ohio 1987) ( quoting Committee on Finance, S.Rep. No. 1106, 95th Cong., 2d Sess. 5 (1978)). V. CONCLUSION
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.