In Re Jones

Edmund G. Brown, Joyce E. Hee, David Lew (argued), Office of the Attorney General, Oakland, CA, for the appellant.

Max Cline, Melanie Tavare (argued), Oakland, CA, for the debtors-appellees.

Before: D.W. NELSON, M. MARGARET McKEOWN, and RONALD M. GOULD, [1] Circuit Judges.

The opinion filed July 12, 2011 is withdrawn and replaced with the accompanying opinion.

With these amendments, the panel has voted to deny the petition for panel rehearing. The petition for panel rehearing is denied. No further petitions for en banc or panel rehearing shall be permitted.

McKEOWN, Circuit Judge:

At issue in this bankruptcy appeal is a tax debt owed by Brenda Marie Jones ("Jones") to the California Franchise Tax Board ("FTB"). The bankruptcy court and the Bankruptcy Appellate Panel ("BAP") found that the debt was not excepted from discharge in Jones's Chapter 7 bankruptcy proceeding. Although debts arising before a discharge order in a Chapter 7 proceeding are generally discharged, certain tax debts are excepted. See 11 U.S.C. § 727 (b); see also id. §§ 523(a)(1)(A), 507(a)(8). A statute of limitations, known as the "three-year lookback period," carves out tax debts arising from a taxable…