Byrum
Byrum v. Internal Revenue Service (In re Byrum)
Opinion
Lead Opinion
Pfaelzer, J.
MEMORANDUM OF DECISION AND ORDER
This appeal concerns whether a tax fraud penalty assessed by the Internal Revenue Service (“IRS”) against the debtors Alton Vaughn Byrum and Juanita Doris Byrum (“the Byrums”) is dischargeable under Chapter 7 pursuant to section 523(a)(7)(B) of the Bankruptcy Code. 11 U.S.C. § 523 (a)(7)(B). Bankruptcy Court Judge John E. Ryan held that the debt was dis-chargeable. In reaching this determination, Judge Ryan had occasion to construe section 523(a)(7), which sets forth various exceptions to discharge of debts under the Bankruptcy Code. He concluded first that the language of section 523(a)(7) is unambiguous as it applies to the facts of the Byrums’ case, and second, that under section 523(a)(7) a tax penalty imposed on a tax liability arising more than three years before the filing of a bankruptcy petition was dischargeable, even where the underlying tax liability was not. Accordingly, the tax penalty assessed by the IRS against the Byrums was discharged by the Bankruptcy Court. This Court affirms.
FACTS AND BASIS OF JURISDICTION
On May 7, 1979, the Byrums filed a joint income tax return for the calendar year *499 1978. The return failed to…