Discharge Denied for using IRS to shield money from Creditors.
Another big victory at OSIPOV BIGELMAN, P.C.
Last year, I litigated a four-day trial as counsel for the Bankruptcy Trustee seeking to deny the Debtors’ discharge. On April 17, 2023, we received the Court’s opinion yesterday granting judgment in our favor.
These Debtors used the IRS and the Michigan Department of Treasury to shield their money from creditors by overpaying estimated taxes and then year after year instead of requesting the overpayment (tax refund) be returned to them would apply it to potential tax liability for the following year. This behavior continued after the Debtors filed bankruptcy which ultimately cost them their discharge.
The court opinion contains an excellent discussion of the interpretative case law of Section 727 of the Bankruptcy Code and the intent elements at play in this case.
Wylie v. Wylie (In re Wylie), 2023 Bankr. LEXIS 1038, at *1 (Bankr. E.D. Mich. Apr. 17, 2023)