Douglas A. Rushford

UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In Re
Douglas A. Rushford
Debtor
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Case No. 06-11088
Chapter 13
Judge Burton Perlman
DECISION AND ORDER
In this Chapter 13 case, the United States, on behalf of the
Internal Revenue Service, (hereafter “IRS”) has filed a Motion to
Dismiss 	debtor’s 	case 	pursuant 	to 	11 	USC 	§1307(c)and 	(e), 	and
§1308. 	In its motion, the IRS specifies that the grounds for its
motion is that debtor has failed to file federal income tax returns
for all taxable periods ending during the four-year period prior to
the commencement of this case.
This document has been electronically entered in the records of the United
States Bankruptcy Court for the Southern District of Ohio.
IT IS SO ORDERED.
Dated: December 15, 2006
____________________________________________________________
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The 	matter 	came 	on 	for 	hearing 	at 	which 	time 	the 	debtor
testified, 	as 	did 	Ms. 	Barbara 	Boenker 	on 	behalf 	of 	the 	IRS.
Documentary evidence was presented as well.
It was admitted that the debtor had failed to file federal tax
returns 	prior 	the 	§341 	Meeting 	of 	Creditors 	since 	the 	year 	2000.
Debtor 	testified 	that 	the 	returns 	were 	not 	filed 	because 	he
mistakenly 	believed 	that 	his 	wife 	was 	filing 	returns 	each 	year.
Debtor is a self-employed real estate agent. 	He testified further
that he had prepared and filed returns for years 2000 through and
including 	2005 	prior 	to 	the 	hearing. 	Debtor 	testified 	that 	he
believed 	that 	he 	filed 	returns 	for 	the 	years 	1996 	and 	1997, 	but
that he had but minimal income in 1998 and 1999 and therefore did
not 	file 	returns 	for 	those 	years. 	He 	testified 	that 	he 	had
received a notice from the IRS in the summer of 2006 informing him
that he had not filed returns for a couple of years. 	He says that
he then telephoned IRS and this led to his filing of returns. 	He
denied that he had received any notices from IRS prior to 2006.
Ms. Boenker, a bankruptcy specialist with IRS, testified that
debtor 	had 	filed 	no 	federal 	tax 	returns 	from 	1996 	through 	and
including 2005. 	She testified that during that period the IRS had
sent 	a 	number 	of 	notices 	to 	the 	debtor 	and 	made 	efforts 	at
telephone communication with no response.
From 	the 	evidence 	presented 	to 	the 	Court, 	we 	find 	the
following facts. 	Debtor filed no federal tax returns 1996 through
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and 	including 	2005, 	until 	he 	recently 	filed 	returns 	for 	2000
through 	2005. 	It 	was 	admitted 	by 	debtor 	that 	he 	did 	not 	file
returns for the years 2000 through 2005 prior to the 341 Meeting.
While 	he 	testified 	that 	he 	filed 	returns 	for 	1996 	and 	1997, 	the
evidence was that IRS has no record of having received any returns
for the years 1996 to 1999 inclusive. 	Debtor presented no evidence
sufficient to rebut the presumption that returns were not sent for
those years, despite his testimony to the contrary. See Surowka v.
U.S., 909 F.2d 148(6th Cir. 1990).
The 	pertinent 	sections 	of 	the 	Bankruptcy 	Code 	are 	the
following:
“11 U.S.C. §1307 Conversion or Dismissal”
***
(e) 	Upon 	the 	failure 	of 	the 	debtor 	to
file a tax return under section 1308, on
request 	of 	a 	party 	in 	interest 	or 	the
United 	States 	trustee 	and 	after 	notice
and a hearing, the court shall dismiss a
case or convert a case under this chapter
to a case under Chapter 7 of this title,
whichever is in the best interest of the
creditors and estate.
***
and
“11 U.S.C. §1308 Filing of Pre-Petition Tax Returns”
(a) 	Not 	later 	than 	the 	day 	before 	the
date 	on 	which 	the 	meeting 	of 	the
creditors 	is 	first 	scheduled 	to 	be 	held
under 	section 	341(a), 	if 	the 	debtor 	was
required 	to 	file 	a 	tax 	return 	under
applicable nonbankruptcy law, the debtor
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shall 	file 	with 	appropriate 	tax
authorities 	all 	tax 	returns 	for 	all
taxable periods ending during the 4-year
period 	ending 	on 	the 	date 	of 	the 	filing
of the petition.
***
There 	is 	no 	question 	as 	far 	as 	the 	admitted 	facts 	are
concerned that debtor has failed to comply with the requirements of
the statute, and that he failed to file required tax returns prior
to the §341 Meeting. 	Section 1308(e) then mandates that the court
dismiss or convert the case to a Chapter 7. 	The court can perceive
no benefit to a conversion to Chapter 7, and therefore the motion
of the IRS to dismiss the case is granted.
While 	debtor 	argues 	that 	it 	is 	his 	intention 	to 	give 	up 	his
home, and to make full payment to IRS if he is allowed to continue
his Chapter 13 case, the circumstances here are so egregious, and
the statute so clear, that the Court must dismiss the case.
SO ORDERED.
Copies to:
Gregory M. Wetherall
4030 Mt. Carmel-Tobasco Road, Suite 1212
Cincinnati, OH 45255
Margaret Burks
Chapter 13 Trustee
36 E. Fourth Street, Suite 700
Cincinnati, OH 45202
Terry Serena
Special Assistant U.S. Attorney
312 Elm Street, Suite 2300
Cincinnati, OH 45202
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U.S. Trustee
36 E. 7 th Street
Cincinnati, OH 45202
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