In Re Noel Olshan, Debtor. R. Todd Neilson, Chapter 7 Trustee for the Estate of Noel Olshan v. United States

This case involves the disposition of a claim by the Internal Revenue Service (“IRS”) against Noel Olshan, the debtor in bankruptcy, for unpaid taxes. The bankruptcy court rejected the claim, but the district court reversed and remanded for further proceedings, ruling that the bankruptcy court had erred in applying the burden-shifting rubric for resolving tax claims. The bankruptcy trustee, R. Todd Neilson, appeals the district court’s order.

The threshold issue is whether we have jurisdiction to hear this appeal, given that the district court remanded the case for further proceedings rather than entering a final judgment. Because we find that our resolution of the central question on appeal will materially aid the bankruptcy court in reaching its disposition on remand and serve the interest of judicial efficiency, we will reach the merits of the appeal. On the merits, we agree with the district court that the bankruptcy court erred in rejecting the IRS’s claims for unreported non- business income and overstated business deductions after finding that the IRS’s method of computing Olshan’s unreported business income was flawed. We also agree that the bankruptcy court erred in…