Opinion
Case No. 06-14247-JNF.
February 16, 2007
THE COMMISSIONER OF MASSACHUSETTS DEPARTMENT OF REVENUE'S MOTION TO DISMISS THE CASE
NOW COMES Alan LeBovidge, as he is Commissioner of the Massachusetts Department of Revenue (hereinafter, "MDOR"), by and through undersigned counsel, and pursuant to Section 521(j)(1), 1307 and 1308 of the United States Bankruptcy Code and in accordance with the provisions of Federal Rules of Bankruptcy Procedure Rules 1017(f), 9013 and 9014, moves to dismiss the above-captioned case. In support of this motion, MDOR avers and asserts as follows:
PRE-PETITION TAX RETURNS
1. Apostolos and Giannoula Hatzidis ("Debtors") filed for Bankruptcy protection under Chapter 13 of the Bankruptcy Code on November 14, 2006.
2. On January 17, 2007 the MDOR filed a proof of claim for $89,602.56: $61,831.94 priority unsecured, and $27,770.62 general unsecured. The proof of claim is based upon estimates for personal income taxes, meals taxes and withholding taxes.
3. The debtors attended a meeting mandated by Chapter 341 of the Bankruptcy code on January 4, 2007.
4. The debtors have not filed their Massachusetts personal income tax return for tax years 1999, 2000, 2001, 2002, 2003, 2004 and 2005. Additionally, the debtor's businesses have failed to file many meals tax returns and withholding tax returns.
5. Pursuant to 11 U.S.C. § 1308(a) the debtor was required to have filed all tax returns by the day preceding the Creditor's meeting for all tax returns due for the previous four years prior to the filing date. By failing to file said tax returns the debtor is in non-compliance with § 1308.
6. Pursuant to 11 U.S.C. § 1307(e) this Honorable Court has the authority to either Dismiss or Convert to Chapter 7 any case that fails to comply with § 1308.
POST-PRETITION TAX RETURNS
7. The Debtors are required as a matter of applicable non-bankruptcy law (specifically, the tax laws of the Commonwealth of Massachusetts) to file and pay Massachusetts meals taxes and withholding taxes on their businesses (hereinafter, the "Trust Fund Taxes").
8. The debtors have failed to file any post-petition meals tax or withholding Massachusetts tax returns. Additionally, the MDOR has not received any monies for any post-petition taxes.
9. Since the petition date, the Debtor has continued to operate a business as a caterer.
10. Pursuant to Section 521(j)(1) of the Bankruptcy Code: . . . if the debtor fails to file a tax return that becomes due after the commencement of the case or to properly obtain an extension of the due date of filing such return, the taxing authority may request that the court enter an order converting or dismissing the case." He debtors currently owe post-petition meals tax returns for the months of November and December 2006.
11. Pursuant to Section 1307 of the Bankruptcy Code ". . . on the request of a party in interest . . . and after notice and hearing, the court may convert a case under this chapter to a case under chapter 7 of this title, or may dismiss a case under this chapter, whichever is in the best interests of the creditors and the estate, for cause . . ."
12. Pursuant to Section 1305 of the Bankruptcy Code the MDOR may file a post petition claim for the taxes due. However, since these tax returns have not been filed the MDOR would have to make an estimate of what was due, either by filing a post petition claim or by assessment. The MDOR has not yet done either.
CONCLUSION
The MDOR's motion should be allowed and the debtor's case dismissed.
WHEREFORE, Alan LeBovidge, as he is Commissioner of the Massachusetts Department of Revenue, respectfully requests that this Honorable Court dismiss the above-captioned case with all appropriate speed and for such other and further relief as may be just and proper.