PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 15-3761
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IN RE: THOMAS GIACCHI,
Appellant
THOMAS GIACCHI
v.
UNITED STATES OF AMERICA
DEPARTMENT OF THE TREASURY INTERNAL
REVENUE SERVICE
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On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D. C. Civil Action No. 5-14-cv-01156)
District Judge: Honorable Joseph F. Leeson, Jr.
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Submitted under Third Circuit LAR 34.1(a)
on June 22, 2016
Before: *FISHER, GREENAWAY, JR. and ROTH, Circuit
Judges
(Opinion filed: May 5, 2017)
David F. Dunn
David Dunn Law Offices, PC
1248 W. Hamilton Street
Allentown, PA 18102
Counsel for Appellant
Julie C. Avetta
Ellen P. DelSole
Gilbert S. Rothenberg, Esq.
United States Department of Justice
Tax Division
95 Pennsylvania Avenue, N.W.
P.O. Box 502
Washington, DC 20044
Counsel for Appellee
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OPINION OF THE COURT
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*
The Honorable D. Michael Fisher assumed senior status on
February 1, 2017
2
ROTH, Circuit Judge
In this appeal, we must determine whether Internal
Revenue Service Forms 1040, filed after the IRS has made an
assessment of the taxpayer’s liability, constitute “returns” for
purposes of determining the dischargeability in bankruptcy of
tax debts under 11 U.S.C. § 523(a)(1)(B). Thomas Giacchi
did not file tax returns on time for the years 2000, 2001, or
2002. Instead, he filed the forms years after they were due
and after the Internal Revenue Service had assessed a liability
against him. In 2010 and 2012, Giacchi filed for bankruptcy,
and in 2013 he sought to discharge his tax liability for the
years 2000, 2001, and 2002. The District Court affirmed the
Bankruptcy Court’s order denying the discharge. We will
affirm the District Court’s ruling.
I. Background
Giacchi failed to file Forms 1040 for 2000, 2001, and
2002 in a timely manner. 1 In 2004, the IRS investigated and
assessed a tax liability against Giacchi for 2000 and 2001.
Approximately one month after the IRS made those tax
assessments, Giacchi filed Forms 1040 for 2000 and 2001.
However, he did not file his overdue Form 1040 for 2002 at
that time. The IRS assessed his 2002 tax liability in 2005,
and Giacchi submitted a Form 1040 for 2002 in 2006. Based
on information in the forms Giacchi filed, the IRS abated a
portion of the assessment it had made.
In 2010, Giacchi filed a voluntary Chapter 7
bankruptcy petition and received a discharge of his
1
A Form 1040 is a document with which an individual
taxpayer reports to the federal government his or her federal
income tax liability.
3
Pennsylvania tax liability. In 2012, Giacchi filed a Chapter
13 bankruptcy petition and brought this adversary proceeding
against the federal government to seek a judgment that his
assessed federal income tax liabilities for the years 2000,
2001, and 2002 had been discharged in his Chapter 7
bankruptcy. The Bankruptcy Court concluded that the tax
debt in question, owed by Giacchi to the IRS, was non-
dischargeable under 11 U.S.C. § 523(a)(1)(B) because
Giacchi had failed to file tax returns for 2000, 2001, and
2002, and Giacchi’s belatedly filed documents were not
“returns” within the meaning of § 523(a)(1)(B) and other
applicable law. The District Court affirmed. Giacchi
appeals.
II. Discussion
A. Standard of Review
We have jurisdiction over the final order of the District
Court, entered in a bankruptcy proceeding, pursuant to 28
U.S.C. §§ 158(d)(1) and 1291. Our standard of review is the
same as that exercised by the District Court over the decision
of the Bankruptcy Court. 2 Accordingly, we review findings
of fact for clear error and exercise plenary review over
questions of law.3
B. Dischargeability
The general rule—that a debtor who files a Chapter 7
bankruptcy petition is discharged from personal liability for
2
In re Schick, 418 F.3d 321, 323 (3d Cir. 2005).
3
In re Fruehauf Trailer Corp., 444 F.3d 203, 209-10 (3d Cir.
2006).
4
all debts incurred before the filing of the petition—is subject
to several exceptions. 4 Section 523(a)(1)(B)(i) of the
Bankruptcy Code excepts from discharge “any . . . debt for a
tax . . . with respect to which a return, or equivalent report or
notice, if required, . . . was not filed or given.” 5 It is
undisputed that Giacchi filed his Forms 1040 after their due
dates. At issue is whether those belatedly filed forms
constitute “returns.” If they do, Giacchi’s tax debts are not
subject to § 523(a)(1)(B)(i)’s exception from discharge; if the
forms do not, Giacchi’s tax debts are excepted from
discharge. 6 This is an issue of first impression for this Court.
In 2005, the Bankruptcy Abuse Prevention and
Consumer Protection Act (BAPCPA) 7 added, for the first
time, a definition of “return” to the Bankruptcy Code. The
definition reads, in pertinent part, “[f]or purposes of this
subsection, the term ‘return’ means a return that satisfies the
requirements of applicable nonbankruptcy law (including
applicable filing requirements).” 8 Several of our sister
circuits have interpreted “applicable filing requirements” to
include filing deadlines so that late-filed forms cannot be
4
11 U.S.C. §§ 727(b), 523(a)(1); In re Hatton, 220 F.3d
1057, 1059-60 (9th Cir. 2000).
5
11 U.S.C. § 523(a)(1)(B)(i).
6
Section 523(a)(1)(B)(ii) prohibits the discharge of tax
liability for which a return was filed within two years
preceding the petition for bankruptcy. Because Giacchi
petitioned for bankruptcy more than two years after filing his
tax forms, this provision does not apply. 11 U.S.C. §
523(a)(1)(B)(ii).
7
Pub. L. 109–8, 119 Stat. 23 (2005).
8
11 U.S.C. § 523(a) (referred to as the “hanging paragraph”).
5
“returns.” 9 The government notes that this approach, called
the “one-day-late rule,” fails to harmonize provisions of § 523
that contemplate some late-filed forms are “returns.” 10 We
need not reach the question of whether the “one-day-late rule”
is correct. Instead, we join our sister circuits in applying
Beard v. Commissioner of Internal Revenue, which sets forth
“the requirements of applicable nonbankruptcy law[,]” and
we conclude that Giacchi’s tax debts are non-dischargeable. 11
Under Beard, a document must meet four requirements
to be a tax return: (1) it must purport to be a return, (2) it
must be executed under penalty of perjury, (3) it must contain
sufficient data to allow calculation of tax, and (4) it must
represent an honest and reasonable attempt to satisfy the
requirements of the tax law. 12 Only the fourth factor is at
issue here: whether Giacchi’s Forms 1040 represent an
honest and reasonable effort to comply with the tax law.
Forms filed after their due dates and after an IRS
assessment rarely, if ever, qualify as an honest or reasonable
attempt to satisfy the tax law. 13 This is because the purpose
of a tax return is for the taxpayer to provide information to
9
See In re Fahey, 779 F.3d 1, 4 (1st Cir. 2015); In re Mallo,
774 F.3d 1313, 1317 (10th Cir. 2014), cert. denied sub nom.
Mallo v. I.R.S., 135 S. Ct. 2889 (2015); In re McCoy, 666
F.3d 924, 932 (5th Cir. 2012).
10
11 U.S.C. § 523(a)(1)(B)(ii).
11
Beard v. Comm’r, 82 T.C. 766, 777 (T.C. 1984), aff’d, 793
F.2d 139 (6th Cir. 1986).
12
See In re Justice, 817 F.3d 738, 741 (11th Cir. 2016); In re
Hindenlang, 164 F.3d 1029, 1033 (6th Cir. 1999).
13
In re Moroney, 352 F.3d 902, 905-06 (4th Cir. 2003).
6
the government regarding the amount of tax due. 14 If a
taxpayer does not file a return, the IRS is required to
independently assess the taxpayer’s liability, as it did when
Giacchi failed to timely file his 2000, 2001, or 2002 tax
returns. Once the IRS assesses the taxpayer’s liability, a
subsequent filing can no longer serve the tax return’s purpose,
and thus could not be an honest and reasonable attempt to
comply with the tax law. 15 Here, there is no dispute that
Giacchi failed to file timely returns, and that, as a result of
Giacchi’s failure, the IRS had to estimate his taxes without
his assistance.
Giacchi’s argument that his filings constitute tax
returns is two-fold. First, Giacchi argues that the tardiness of
his filings does not render them any less of an honest and
reasonable attempt to comply with tax law, relying on the
Eighth Circuit’s holding in In re Colsen that the “honest and
reasonable attempt” inquiry focuses on the content of the
form, not the circumstances of its filing. 16 We decline to
adopt the Eighth Circuit’s approach, and agree with the
weight of authority that the timing of the filing of a tax form
14
United States v. Galletti, 541 U.S. 114, 122 (2004) (“‘The
Federal tax system is basically one of self-assessment,’
whereby each taxpayer computes the tax due and then files
the appropriate form of return along with the requisite
payment.” (quoting 26 CFR § 601.103(a) (2003))).
15
Justice, 817 F.3d at 744; In re Moroney, 352 F.3d at 906;
Hindenlang, 164 F.3d at 1034-35.
16
In re Colsen, 446 F.3d 836, 840 (8th Cir. 2006); see In re
Payne, 431 F.3d 1055, 1061-62 (7th Cir. 2005) (Easterbrook,
J., dissenting).
7
is relevant to determining whether the form evinces an honest
and reasonable attempt to comply with tax law. 17
Second, Giacchi asserts that, because his late-filed
forms showed less tax liability and the IRS abated the tax
assessment based on those filings, the filings served a tax
purpose and thus constitute returns. This argument misses the
point. Giacchi failed to provide the IRS information to
determine his tax liability so that the IRS had to estimate his
taxes without his assistance; Giacchi cannot now seek to
benefit from the IRS’s imprecise estimate. Giacchi’s belated
filings are merely self-serving bids to reduce his tax
liabilities, rather than attempts to comply with the
requirements and objectives of prompt self-reporting and self-
assessment. 18
Finally, Giacchi suggests in passing that his
delinquency in filing should be excused because of his
“emotional state” during those years. Although
“[c]ircumstances . . . might demonstrate that the debtor,
despite his delinquency, had attempted in good faith to
17
See Comm’r v. Lane-Wells Co., 321 U.S. 219, 223 (1944);
Justice, 817 F.3d at 746; Payne, 431 F.3d at 1057-60;
Moroney, 352 F.3d at 907; Hatton, 220 F.3d at 1060-61;
Hindenlang, 164 F.3d at 1034-35.
18
Moroney, 352 F.3d at 906; see Justice, 817 F.3d at 744.
8
comply with the tax laws[,]” Giacchi’s “emotional state”
during the tax years in question is not one of them. 19
III. Conclusion
We hold that Giacchi’s belated filings after assessment
are not an honest and reasonable effort to comply with the tax
law under the Beard test and, as such, the filings do not
constitute returns. Because Giacchi’s tax debts for tax years
2000, 2001, and 2002 are debts for tax obligations for which
no return was filed, the debts are not dischargeable in
bankruptcy pursuant to 11 U.S.C. § 523(a)(1)(B).
Accordingly, we will affirm the order of the District Court.
19
Justice, 817 F.3d at 746 n.8 (citing Moroney, 352 F.3d at
907); Moroney, 352 F.3d at 906 (rejecting the proffered
justification that the taxpayer “simply did not ‘get around to
filing his tax returns.’”); In re Payne, 431 F.3d 1055, 1057,
1059-60 (7th Cir. 2005) (rejecting the proposed excuse that
the taxpayer was having a “difficult” period in his life).
9