Opposition Brief — Waugh v. Internal Revenue Service, 118 S. Ct. 80 (1997) (No. 96-2036)

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In the Supreme Court of the Une Snes

OCTOBER TERM, 1996

WILLIAM WINSTON WAUGH, PETITIONER

INTERNAL REVENUE SERVICE

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

BRIEF FOR THE RESPONDENT IN OPPOSITION

WALTER DELLINGER

Acting Solicitor General

LORETTA C. ARGRETT

Assistant Attorney General

GARY D. GRAY

SARA S. HOLDERNESS

Attorneys

Department of Justice

Washington, D.C. 20520-0001

(202)514-2217

QUESTION PRESENTED

Whether the three-year priority period established

in Section 507(a)(8)(A)(i) of the Bankruptcy Code runs

during the pendency of a bankruptcy proceeding.

(I)

TABLE OF CONTENTS

Page

I ld ace taal siealionchnidda lah bactdbbsiasiennieaandnnaniia 1

EIS TESTS AY an) OnE TOE ON De TEEN ]

AEE En a a a ee Ee 2

I Sits ail icaal ash aenhiaehiamipiinnesanianntindatthennimannaasnenes 6

I a peuiiaubuanshausnnnns 13

TABLE OF AUTHORITIES

Cases:

Acosta v. IRS, 184 B.R. 544 (W.D. Tenn. 1995) ..... 10

Bowling, In re, 147 B.R. 383 (Bankr. E.D. Va.

SE niin hihntcediitiddinadldidansbsibaeaiins Anediesanenghiaitbntnneivaisees il

Brickley, In re, 70 B.R. 113 (Bankr. 9th Cir. 1986) .... 10

Bryant, In re, 120 B.R. 983 (Bankr. E.D. Ark.

SS pga as er eee ee ee ae PN 11

Carter, In re, 74 B.R. 613 (Bankr. E.D. Pa. 1987) .... 11

Cowart, In re, 199 B.R. 799 (Bankr. M.D. Fla.

REESE CSAP EE RPP RRC Ese tae eS SP er 10

Darden, In re, 202 B.R. 715 (Bankr. E.D. Va. 1996) . 10

Davidson, In re, 120 B.R. 777 (Bankr. D.N.J.

a eneniben 11

Deitz, In re, 116 B.R. 792 (D. Colo. 1990) ........00..0..... 10

DiCamillo, In re, 186 B.R. 59 (Bankr. E.D. Pa.

a a os clednmnobonsbente 10

Eysenbach, In re, 183 B.R. 365 (W.D.N.Y. 1995) ...... 10

Florence, In re, 115 B.R. 109 (Bankr. S.D. Ohio

ESS AE Re A a 11

Gore, In re, 182 B.R. 293 (Bankr. N.D. Ala. 1995) .... 11

Harris, In re, 167 B.R. 680 (Bankr. M.D. Fla.

a oiviimenonantnics 10

Jones, In re, 177 B.R. 541 (Bankr. N.D. Ohio 1994) .. 11

Linder, In re, 139 B.R. 950 (D. Colo. 1992) ............... 10

(III)

Cases—Continued: Page

Macko, In re, 193 B.R. 72 (Bankr. M.D. Fla. 1996) .. 11

McMillan, In re, 204 B.R. 835 (Bankr. M.D. Ga.

RUD. nsepceitnebisintieeuastnsadipiaaduinndamdadsddtintaiininttheiuactalces 10

Molina, In re, 99 B.R. 792 (S.D. Ohio 1988) .............. 10

Montoya, In re, 965 F.2d 554 (7th Cir. 1992) ........... 10, 11

Pastula, In re, 203 B.R. 941 (Bankr. M.D. Fla.

ED sisasinsonciieeeieeabeabnendinaa Dee dedsdianseceneses 11

Pepper v. Litton, 308 U.S. 295 (1939) ..................068 7

Quenzer, In re, 19 F.3d 163 (5th Cir. 1993) .............. 11, 12

Quinlan, In re, 107 B.R. 300 (Bankr. D. Colo.

| Ee, Den SUSE: Pee NG HR PONS ae SONS ON EE Se 11

Richards, In re, 994 F.2d 763 (10th Cir. 1993) ....... 7&6

10, 11, 12

Ringdahl, In re, Bankr. L. Rep. (CCH) 4 74,082

(Hemmer. TEED. Fon; SOD, TOG ED vncaceicsestsnscsccccsnsieces 11

Ross, In re, 130 B.R. 312 (Bankr. D. Neb. 1991) ....... 11

Shabazz, In re, 206 B.R. 116 (Bankr. E.D. Va.

SOD: cninicsunienssayariiciticiasicanbladagabesabasadaiaietisavineiaaaicmagens 10

Shedd, In re, 190 B.R. 692 (Bankr. M.D. Fla. 1996) . 10

Solito v. United States, 172 B.R. 837 (W.D. La.

BED vc cacstinssdsteccsecebobanteeaabtaeilanindetaaenatiadiiaiesedds 10

Stoll, In re, 132 B.R. 782 (Bankr. N.D. Ga. 1990) ..... 11

Taylor, In re, 81 F.3d 20 (3d Cir. 1996) ................44 10, 11

Teeslink, In re, 165 B.R. 708 (Bankr. S.D. Ga.

BOD ockisnkecicccrcsbintiiadealaittnabamdiaaicblidarnleisiedaons 10-11

Tibaldo, In re, 187 B.R. 673 (Bankr. C.D. Cal.

SUSI inhicsncnsiteieddatacinaidanaiseehantnndaniadineiininabietnmeiie 10

Turner, In re, 182 B.R. 317 (1995), adhered to on

reconsideration, 195 B.R. 476 (Bankr. N.D. Ala.

OID x sitonerisincinennibneniadealaianiniabmnbpeeilianeteatnntinies 11

United States v. Energy Resources Co., 495 U.S.

GOR CII eiveistiite ie iininnimine 7

United States v. Ron Pair Enterprises, Inc.,

GD UT FE, Fe Ce sated tincsesseetnitncintiasisnsncnesine 7, 12

West, In re, 5 F.3d 423 (9th Cir. 1993), cert. denied,

GEE Sia, Se Se ei iecicce siantenstctecensetainesinieveninns 10, 11

Cases—Continued: Page

West v. United States, 511 U.S. 1081 (1994) ............. 3

Wise, In re, 127 B.R. 20 (Bankr. E.D. Ark. 1991) ....... 11

Statutes:

Bankruptcy Code, 11 U.S.C. 101 et seq.:

Ch. 1, 11 U.S.C. 101 et seq:

Be Be IEE Sisnaindendanvbnnancsditninncieiniianconaans 4,114, 2

Pe Fe Ak UE sadeeda tien cacateniiaeneianicasiuainineibneyenbinipiniions 12

PE Renee IE ninhicncavknnsoreninebacncvedinnenesinte 6, 9, 11, 12

Ch. 3, 11 U.S.C. 301 et seq.:

a I zak ih alnidcdidnsansh pec oneamniecanensaamansnionses 2,8

Be eG CED irerevestbinibonseuchinicasnimncnbniieientnis 2

Ch. 5, 11 U.S.C. 501 et seq.:

ER Re EE Daaensnidinadancedvinieiicdineptictnvdnnanianiiciiinine 12

11 US.C. S0TaXTHANI) (1988) ...................eceeee. 3

EE Eres eI siicaleidek inndbitdiiveanaseimnnssceniinianiinnes 6

OF Rees CIEE tatentlsdovecenenacceasarnsian 5, 10, 11, 12

RR UB. BTR) nsecccssncansesssccnseosens 3, 4, 6, 7, 8

Be Gree HED nipictinsccnsnsictacinccnrprnasiopconente 3

CAR. Fi Ee Rae I TIE, eiietspcinninsinsstciassincn setannneinsonicio 2, 3,8

AF. By Ee Sites BO eID, nideentecnnsisivncesnsvemnensnes 2

mks Ty: 2 eo Ses SE TEED. Nelterctoesennesesdvanskunnuncvins 2,8

Bankruptcy Reform Act of 1994, Pub. L. No. 103-394,

108 Stat. 4106:

Fo Fe | | . Senne en en 3

as Be Ps AI ainsi tn dcsecraestccintioniainsninpsistctntenaii 3

Bankruptcy Tax Act of 1980, Pub. L. No. 96-589,

et NE MEINE ssa nctepnacrncsdaieh be cceuinnuitdadsehtecmnadnnannes gy

Internal Revenue Code (26 U.S.C.):

BE dich eteniasdinti dein apadiitiatialicuabiaengitcdlsabiiedientenduanians 6, 11, 22

Ie IIIT sissssLisossaienceteendledabhenaeiusdedidetd ltendataishhowehiniionindatialasaaeal 8, 9

ED - savndiscsisvebiceisaideeicvahcnceaidieminananininiabeibainanaas ata 6, 9

Miscellaneous:

S. Rep. No. 1158, 89th Cong., 2d Sess. (1966) ............ 8

S. Rep. No. 989, 95th Cong., 2d Sess. (1978) .............. 8, 9

S. Rep. No. 1035, 96th Cong., 2d Sess. (1980) ............ 9

In the Supreme Court of the Giuted States

OCTOBER TERM, 1996

No. 96-2036

WILLIAM WINSTON WAUGH, PETITIONER

Vv.

INTERNAL REVENUE SERVICE

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

BRIEF FOR THE RESPONDENT IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. Al-

A10) is reported at 109 F.3d 489. The opinion of the

district court (Pet. App. Al1-A27) is unofficially

reported at 76 A.F.T.R.2d 95-7059. The opinion of the

bankruptcy court (Pet. App. A28-A34) is unofficially

reported at 75 A.F.T.R.2d 95-2601.

JURISDICTION

The judgment of the court of appeals was entered on

March 26, 1997. The petition for a writ of certiorari

was filed on June 24, 1997. The jurisdiction of this

Court is invoked under 28 U.S.C. 1254(1).

(1)

STATEMENT

1. a. On April 15, 1988, petitioner filed his federal

income tax return for the taxable year 1987 but failed

to pay the tax due. On July 1, 1988, petitioner filed a

petition for relief under Chapter 13 of the Bankruptcy

Code. The bankruptcy case was subsequently con-

verted to proceedings under Chapter 11. The bank-

ruptcy court initially confirmed petitioner’s Chapter

11 plan but later revoked it (because petitioner failed

to make child support and alimony payments in

accordance with the plan) and dismissed petitioner’s

case. Petitioner appealed to the district court from

the order of revocation and dismissal. Petitioner was

granted a stay pending that appeal. From July 1, 1988

(the date that petitioner filed his petition) until

February 6, 1991 (the date the district court affirmed

the bankruptcy court’s order dismissing the bank-

ruptcy case), the government was prevented from

taking any action to collect petitioner’s 1987 tax

liabilities by (i) the automatic stay provided by

Section 362 of the Bankruptcy Code (11 U.S.C.

362(a)(6)), (ii) the provisions of the confirmed re-

organization plan and (ili) the stay pending appeal

from the order of dismissal. Pet. App. A2.

b. On May 9, 1991, petitioner filed a second petition

for relief, this time under Chapter 7 of the Bank-

ruptcy Code. Under the provisions of this Chapter,

he was granted a discharge on August 27, 1991. Pet.

App. A2.

2. On April 2, 1994, petitioner filed his income tax

return for 1998. He directed that his income tax

refund of $11,019 for that year, plus an additional cash

payment of $847 that he remitted with his return, be

applied by the Internal Revenue Service against his

outstanding 1989 tax liability. The Service, however,

instead applied the 1993 tax refund and the cash

remittance to petitioner’s still unsatisfied 1987 tax

liability. The Service also sent notices advising peti-

tioner of the government’s intent to levy on his assets

to recover his remaining unpaid income tax liabilities

for 1987 ($157,631.36) and 1989 ($15,620.52). Pet. App.

A2.

3. In response to these notices of intent to levy,

petitioner filed a complaint in bankruptcy court seek-

ing a declaration that his 1987 tax liability had been

discharged in his Chapter 7 case. Pet. App. A2-A3.

a. Under Sections 507(a)(8)(A)(i) and 523(a)(1)(A) of

the Bankruptcy Code, an income tax obligation of a

debtor is entitled to priority status and is not

dischargeable if the last day on which the tax return

could have been filed falls within three years of

the date of the filing of the bankruptcy petition. 11

U.S.C. 507(a)(8)(A)(i), 523(a)(1)(A).’ Petitioner as-

serted, however, that, because his 1987 tax return was

due on April 15, 1988—a date more than three years

prior to the filing of his Chapter 7 petition on May 9,

1991—his income tax liability for 1987 was not enti-

tled to priority status in ‘the Chapter 7 proceeding

under Section 507(a)(8)(A)(i). If, as petitioner claimed,

the tax liability was not entitled to priority status in

the Chapter 7 proceeding, it would have been within

the scope of the discharge that he received in that

proceeding. Pet. App. A2.

1 Effective October 22, 1994, Section 507(a)(7)(A)(i) was

renumbered Section 507(a)(8)(A)(i). Bankruptcy Reform Act

of 1994, Pub. L. No. 103-394, §§ 304(c)(2), 702(b), 108 Stat. 4132,

4150. The provision was otherwise unchanged. Consistent with

the decisions below, we use the new section number throughout

this brief.

The government contended, however, that the

three-year priority period of Section 507(a)(8)(A)(i)

was extended by the period of time that the govern-

ment was prevented by petitioner’s first bankruptcy

case from collecting his 1987 taxes. The priority

period therefore would not have expired before peti-

tioner filed his second bankruptcy case, and those

taxes therefore would not have been within the scope

of the discharge received in that proceeding. Pet.

App. A3.

b. The bankruptcy court agreed with the govern-

ment’s position. The court stated that a “literal

reading and ‘plain meaning’ approach to the Bank-

ruptcy Code, seems to indicate that [an] income tax

liability of a debtor who has filed a return, which is

last due more than three years before the filing of a

bankruptcy case, is not covered by the nondischarge-

ability provision of 11 U.S.C. § 523(a)(1); even where

the same tax debt was involved in an earlier bank-

ruptcy case as a nondischargeable tax liability falling

within the three year period” (Pet. App. A31). The

court noted, however, that nearly every reported

decision holds that the “running of the tax priority

periods fixed in 11 U.S.C. § 507(a)(8)(A) are [sic] tolled

during pendency of bankruptcy proceedings in which

the IRS is stayed from collection efforts to secure

payment of the tax” (id. at A31-A32). The court con-

cluded that these decisions, “clearly driven by percep-

tions of Congressional intent, Bankruptcy Code pur-

pose, and underlying public policy,” are correct and

“reflect a near universal agreement on the state of

the law” (id. at A32-A33). Applying the holdings of

these cases to the facts in the present case, the court

held that “[djebtor’s income tax liability for the 1987

taxes was not dischargeable in his May 9, 1991,

Chapter 7 bankruptcy case” (id. at A33).

4. The district court affirmed. The court stated

that the literal terms of the applicable statutes do not

suspend the running of the priority periods of Section

507(aX(8)(A) during a prior bankruptcy. The court —

held, however, that this was the “rare case” in which

it was necessary to go beyond the literal language of

the statutes (Pet. App. A19). The court explained that

under a purely literal construction of the statute,

debtors would be able to avoid tax obligations simply

by dismissing their first bankruptcy petition after

the priority periods of Section 507(a)(8)(A) expired

and then filing a second petition shortly thereafter

(Pet. App. A19). The court emphasized that, if the pri-

ority periods ran during a pending bankruptcy pro-

ceeding, the government would not be given the time

periods to collect tax liabilities that Congress clearly

sought to provide (id. at A21). The court noted that

the legislative history of these provisions —“militates

directly against the improperly narrow reading sug-

gested by [petitioner]” (id. at A22). Because peti-

tioner’s argument “would operate to defeat the pur-

pose of Congress,” the court concluded that “[t]he

proper result is that the filing of a bankruptcy

petition suspends the running of the three-year col-

lection period in determining tax claim priority

status, pursuant to 11 U.S.C. § 507(a)(8)(A)i)” (id. at

A26).

5. The court of appeals affirmed. The court ac-

knowledged that the “Bankruptcy Code does not con-

tain any provisions which explicitly suspend the

priority period of section 507(a)(8)(A)(i) while a debtor

is engaged in bankruptcy proceedings” (Pet. App. A6).

After examining the structure and history of these

provisions, however, the court agreed with the

district court that this was the “rare case” in which

the plain meaning of legislation should not be applied

in a manner that would frustrate the plain object of

the statute to afford the government a three-year

period for the collection of taxes (id. at A7-A8). The

court therefore concluded that “the three-year prior-

ity period of section 507(a)(8)(A)(i) is suspended by 11

U.S.C. § 108(c) and 26 U.S.C. § 6503(b) and (h), for the

time that the automatic stay prevents the IRS from

collecting outstanding tax debts” (id. at A8).

ARGUMENT

The decision of the court of appeals is correct and

does not conflict with any decision of this Court or

any other court of appeals. Further review is there-

fore not warranted.

1. Petitioner contends (Pet. 5-9) that the decision

of the court of appeals unjustifiably disregards the

language of Sections 108(c) and 507(aX(8)(A\i) of the

Bankruptcy Code and Section 6503 of the Internal

Revenue Code. Petitioner asserts (i) that Section

507(aX8 Ai) is silent regarding any tolling of the

three-year priority period during the pendency of a

prior bankruptcy proceeding, (ii) that Section 108(c)

of the Bankruptcy Code only extends nonbankruptcy

law limitation periods, not the priority periods found

in Section 507(aX8), and (iii) that, while Section

6503(h) of the Internal Revenue Code suspends the

statute of limitations for the assessment or collection

of taxes when the government “is prohibited by rea-

son of [a bankruptcy] case” from assessing or collect-

ing taxes (26 U.S.C. 6503(h)), that statute does not

expressly apply to the three-year priority period of

Section 507(aX(8)A\i). Petitioner further claims that

this is not one of those “rare cases [in which] the

literal application of a statute will produce a result

demonstrably at odds with the intentions of its

drafters” (United States v. Ron Pair Enterprises,

Inc., 489 U.S. 235, 242 (1989)).

As the Tenth Circuit concluded in Jn re Richards.

994 F.2d 763 (1993), however, these statutory provi-

sions are not alone controlling. Authority to suspend

the three-year priority period of Section 507(a)(8)(A)

(i) can be found in a different statutory provision,

Section 105(a) of the Bankruptcy Code. See 994 F.2d

at 765. That Section provides bankruptcy courts with

the authority to issue orders “necessary or appropri-

ate to carry out the provisions of [the Bankruptcy

Code,}] * * * to enforce or implement court orders or

rules, or to prevent an abuse of process.” 11 U.S.C.

105(a). Applying Section 105(a) in United States v.

Energy Resources Co., 495 U.S. 545, 549 (1990), this

Court noted the “traditional understanding” that

bankruptcy courts are courts of equity. See also

Pepper v. Litton, 308 U.S. 295, 303-304 (1939). The

orders in this case—suspending the three-year prior-

ity period of Section 507(a)(8)(A)(i) during petitioner’s

first bankruptcy case—represent an appropriate ap-

plication of this equitable power. See 994 F.2d at 765.

As the court of appeals explained (Pet. App. A9-

A10), the suspension of the three-year priority period

in this case fulfills the statutory design of providing a

reasonable time for the government to collect taxes

and preventing debtors from escaping liability by

shielding their assets in repetitive bankruptcies. As

a result of petitioner’s first bankruptcy proceeding,

the government was precluded from collecting peti-

tioner’s 1987 taxes (i) by the automatic stay provi-

sions of Section 362, (ii) by the provisions of peti-

- 8

tioner’s confirmed plan of reorganization, and (iii) by

the stay that petitioner obtained pending his appeal

from the order revoking his plan and dismissing his

case. Instead of the three years that Congress con-

templated in Section 507(a)(8)(A)(@i) that the govern-

ment would have for collecting taxes, petitioner’s

repetitive bankruptcy filings gave the government

only 169 days to do so: (i) the period of 77 days from

April 15, 1988, the date the 1987 return was due to be

filed, to July 1, 1988, the date the Chapter 13 petition

was filed, and (ii) the period of 92 days from February

6, 1991, the date the district court affirmed the bank-

ruptcy court’s order of revocation and dismissal, to

May 9, 1991, the date the Chapter 7 petition was filed.

Suspending the priority period for collecting taxes

under Section 507(a)(8)(A)(i) during petitioner’s ini-

tial bankruptcy case was necessary to ensure that the

government was not deprived of the full benefit of the

three years that Congress granted for collection

(Pet. App. A9-A10). Accord, In re Richards, 994 F.2d

at 765; S. Rep. No. 989, 95th Cong., 2d Sess. 14 (1978)

(“the tax collector * * * should not lose taxes which

he has not had reasonable time to collect or which the

law has restrained him from collecting”); S. Rep. No.

1158, 89th Cong., 2d Sess. 3 (1966) (excepting priority

taxes from discharge would “discourage recourse to

bankruptcy as a facile device for evading tax obliga-

tions”).” As the court explained in In re Richards,

2 In several related provisions, Congress has evidenced its

clear intent to afford the government an opportunity to collect

taxes unimpeded by intervening bankruptcy cases. Section

6503(b) of the Internal Revenue Code was already in effect

when the Bankruptcy Code was enacted in 1978. It suspends

any limitations on the time in which the government may

collect taxes during the period that the assets of the taxpayer

994 F.2d at 765, “use of the equitable authority in 11

U.S.C. § 105(a) [to deprive debtors of unintended bene-

fits from repetitive bankruptcy filings] is not incon-

sistent with any specific provision of the Bankruptcy

Code, and * * * is consistent with the underlying

philosophy of the Bankruptcy Code.”

The court of appeals was also correct in noting that

acceptance of petitioner’s contrary argument—under

which the three-year priority period would continue

to run during a prior bankruptcy proceeding—would

facilitate schemes of tax avoidance (Pet. App. Al0). A

debtor could avoid paying his tax debt by filing a

petition that stayed collection of taxes, then dismiss-

ing his bankruptcy petition after the three-year pri-

are in the custody or control of any court. See 26 U.S.C.

6503(b). When the Bankruptcy Code was enacted, Congress

specified that nonbankruptcy statutes of limitations (such as

those contained in the Internal Revenue Code) are suspended

until the automatic stay is lifted. 11 U.S.C. 108(c). This provi-

sion is intended to “minimize the administrative problems

governmental tax authorities face, or may face, in collecting

taxes in bankruptcy proceedings.” S. Rep. No. 989, supra, at

14-15.

Shortly after the Bankruptcy Code was enacted, Congress

added Section 6503(h) to the Internal Revenue Code. Bank-

ruptey Tax Act of 1980, Pub. L. No. 96-589, § 6(a), 94 Stat.

3389. That Section specifically tolls the statute of limitations on

assessment and collection of taxes while bankruptcy proceed-

ings are pending. 26 U.S.C. 6503(h). “{I]f the * * * Internal

Revenue Service is prohibited for a period of time by reason of

a bankruptcy case from assessment or collection of tax (for

example, because of the automatic stay under new 11 U.S. Code

sec. 362(a)(6)), The running of the period of limitations is sus-

pended, for assessment, for the prohibition period and for 60

days thereafter; and for collection, for the prohibition period

and for six months thereafter.” S. Rep. No. 1035, 96th Cong.,

2d Sess. 50-51 (1980).

ority period expired and then (as petitioner did in this

case) filing a new petition shortly thereafter. See

also In re West, 5 F.3d 423, 426 (9th Cir. 1993), cert.

denied, 511 U.S. 1081 (1994); In re Montoya, 965 F.2d

554, 556 (7th Cir. 1992). As the Third Circuit stated

in In re Taylor, 81 F.3d 20, 25 (1996), Congress “did

not intend to leave a loophole for debtors to engage in

tax avoidance.” See also Jn re Molina, 99 B.R. 792,

795 (S.D. Ohio 1988) (“Congress did not intend for a

taxpayer to be able to escape liability by protecting

his assets in a bankruptcy proceeding until the stat-

ute of limitations expired.”).

2. a. For these reasons, the courts of appeals have

(with only one, limited exception) consistently con-

cluded that the priority periods set forth in Section

507(aX(8A) are suspended during the pendency of a

prior bankruptcy proceeding. See Pet. App. A8-A9; Jn

re Taylor, 81 F.3d at 25; In re West, 5 F.3d at 426; In

re Richards, 994 F.2d at 765; In re Montoya, 965 F.2d

at 556.° In reaching this conclusion, however, the

courts have applied different analyses.

The lower courts have also generally agreed with this

conclusion. See, e.g., Acosta v. IRS, 184 B.R. 544, 547 (W.D.

Tenn. 1995); In re Eysenbach, 183 B.R. 365, 368 (W.D.N.Y.

1995); Solito v. United States, 172 B.R. 837, 840 (W.D. La.

1994); In re Linder, 139 B.R. 950, 952-953 (D. Colo. 1992); Jn re

Deitz, 116 B.R. 792, 794 (D. Colo. 1990); In re Molina, 99 B.R.

792, 795 (S.D. Ohio 1988); In re Brickley, 70 B.R. 113, 116

(Bankr. 9th Cir. 1986); Jn re Shabazz, 206 B.R. 116, 126 (Bankr.

E.D. Va. 1996); In re McMillan, 204 B.R. 835, 837-838 (Bankr.

M.D. Ga. 1996); In re Darden, 202 B.R. 715, 717 (Bankr. E.D.

Va. 1996); In re Cowart, 199 B.R. 799, 800 (Bankr. M.D. Fla.

1996); In re Shedd, 190 B.R. 692, 694 (Bankr. M.D. Fla. 1996);

In re Tibaldo, 187 B.R. 673, 676 (Bankr. C.D. Cal. 1995); Jn re

DiCamillo, 186 B.R. 59, 62 (Bankr. E.D. Pa. 1995); Jn re

Harris, 167 B.R. 680, 683 (Bankr. M.D. Fla. 1994); Jn re

Some courts, like the court of appeals in this case,

have held that a proper basis for suspending the prior-

ity periods of Section 507(a)(8)(A) results from apply-

ing Section 108(c) of the Bankruptcy Code, in con-

junction with Section 6503 of the Internal Revenue

Code, to achieve the clear legislative intent to allow a

three-year period unobstructed by any bankruptcy

stay of collection. See, e.g., In re Taylor, 81 F.3d at

22-24; In re West, 5 F.3d at 426-427: In re Montoya,

965 F.2d at 557-558. Other courts have relied more

directly on the conclusion that the authority to sus-

pend the priority period of Section 507(a)(8)(A) stems

from the equitable powers of the bankruptcy court

under Section 105(a) of the Bankruptcy Code. See,

e.g., In re Richards, 994 F.2d at 765; In re Jones, 177

B.R. 541, 543-544 (Bankr. N.D. Ohio 1994).

b. Contrary to petitioner’s contention (Pet. 4), the

decision in this case does not conflict with the deci-

sion of the Fifth Circuit in In re Quenzer, 19 F.3d 163

(1993). In that case, as here, the government did not

Teeslink, 165 B.R. 708, 711-712 (Bankr. S.D. Ga. 1994); In re

Bowling, 147 B.R. 383, 385 (Bankr. E.D. Va. 1992): In re

Ringdahl, Bankr. L. Rep. (CCH) 4 74,082, at 99,718 (Bankr.

M.D. Fla. June 5, 1991); In re Stoll, 132 B.R. 782, 785-786

(Bankr. N.D. Ga. 1990); In re Ross, 130 B.R. 312, 313 (Bankr.

D. Neb. 1991); In re Wise, 127 B.R. 20, 23 (Bankr. E.D. Ark.

1991); In re Bryant, 120 B.R. 983, 985 (Bankr. E.D. Ark. 1990):

In re Davidson, 120 B.R. 777, 787 (Bankr. D.N_J. 1990); In re

Florence, 115 B.R. 109, 112-113 (Bankr. S.D. Ohio 1990); In re

Quinlan, 107 B.R. 300, 301 (Bankr. D. Colo. 1989); Jn re Carter,

74 B.R. 613 (Bankr. E.D. Pa. 1987); contra In re Pastula, 203

B.R. 941, 945-948 (Bankr. E.D. Mich. 1997); In re Macko, 193

B.R. 72 (Bankr. M.D. Fla. 1996); In re Turner, 182 B.R. 317

(1995), adhered to on reconsideration, 195 B.R. 476 (Bankr.

N.D. Ala. 1996); In re Gore, 182 B.R. 293, 298-299 (Bankr. N.D.

Ala. 1995).

— i

contend that the literal terms of Section 108(c) of the

Bankruptcy Code and Section 6503 of the Internal

Revenue Code tolled the priority periods of Section

507(a)(8)(A). The government contended instead that

suspension of the priority period was a_ proper

exercise of the court’s authority under Section 105(a)

of the Bankruptcy Code. The Fifth Circuit declined

to consider that argument, however, because the

government had not raised it in the lower courts. 19

F.3d at 165. Because the government had relied

exclusively on Section 105(a) on that appeal, the Fifth

Circuit merely adopted the government’s concession

that the literal terms of Sections 108, 507 and 6503 do

not themselves compel the suspension of the priority

period. /bid.

The court in Quenzer therefore did not consider

either of the arguments accepted by the various

courts that have ruled in favor of the government on

this issue. The court in Quenzer did not consider the

argument, adopted by the court of appeals here, that

this is the “rare case” in which “the intention of the

drafters, rather than the strict language, controls”

(United States v. Ron Pair Enterprises, Inc., 489

U.S. at 242). Nor did the court in Quenzer address

the argument adopted in decisions such as Richards,

994 F.2d at 765, that the priority periods of Section

507(a)(8)(A) may be suspended under Section 105(a) of

the Bankruptcy Code. Instead, the court in Quenzer

specifically declined to address that question because

it had not been raised in the lower courts in that case.

19 F.3d at 165.

A conflict among the circuits thus does not exist on

the proper disposition of the question presented in

this case. On the issues actually litigated in this

case, it cannot be said that the Fifth Circuit would

reach a different result than that reached by the sey-

eral circuits that have addressed them. Thus, when

the same alleged conflict between Quenzer and the

decisions of the other circuits was raised as a basis

for further review in In re West, supra, this Court

denied the petition for a writ of certiorari. 511 U.S.

1081 (1994). Review by this Court is not warranted

CONCLUSION

The petition for a writ of certiorari should be

denied.

Respectfully submitted.