OPINION
RANDOLPH J. HAINES, Bankruptcy Judge.
The issue here is whether § 707(b)(2)(A)(ii)(I) of the Bankruptcy Code
permits a debtor to claim an ownership expense deduction for a vehicle that is owned free and clear of liens, for purposes of determining “the debtor’s projected disposable income” for a Chapter 13 plan. The Court concludes that § 707(b)(2)(A)(ii)(I) allows such a deduction in the amount specified by the Internal Revenue Service (“IRS”) Local Transportation Expense Standards.
Factual Background
Patricia Ann Chamberlain (“Debtor”) has filed a Chapter 13 plan. The Chapter 13 Trustee Edward Maney (“Trustee”) has objected to the plan as not devoting all of the Debtor’s “projected disposable income” to payments to unsecured creditors under the plan, as required by § 1325(b)(1)(A). Because her Current Monthly Income
puts her over the median income for an Arizona family, the “amounts reasonably necessary to be expended”
for her maintenance must be determined in accordance with § 707(b)(2)(A), generally known as the “means test.” Code § 707(b)(2)(A)(ii) provides that the debtor’s “monthly expenses shall be the debtor’s applicable monthly expense amounts specified under the National Standards and Local Standards,
and the debtor’s actual monthly expenses for the categories specified as Other Necessary Expenses issued by the Internal Revenue Service for the area in which the debtor resides.... ”
The Debtor owns a 2000 Chevrolet Cavalier, with 111,000 miles, free and clear of any liens. In determining her expenses, the Debtor listed on Line 28
of Form B22C a $200 Local Standards ownership expense for the vehicle. This was less than the applicable standard, because the IRS Local Ownership Cost for the West Census Region is $471 for the first car and
$332 for the second car.
The Trustee has objected to this expense claim because he maintains that such “ownership expenses” may be claimed only if the car secures a debt (or is leased). He relies on the Internal Revenue Service Collection Financial Standards, which state the “ownership costs provide maximum allowances for the lease or purchase of up to two automobiles.... If a taxpayer has no car payment, ... only the operating cost portion of the transportation standard is used to come up with the allowable transportation expense.”
In order for the Plan to be confirmed, the Trustee has requested the Debtor to increase her disposable monthly income by the $200 vehicle ownership expense deduction. Debtor has responded to the Trustee’s objection by requesting that this Court overrule the Trustee’s objection and allow the $200 vehicle ownership expense deduction, or as a result of this ruling the full $471 Local Transportation Expense Standard.
Analysis
The issue here is the meaning of “expenses shall be the debtor’s applicable monthly expense amounts specified under the National Standards and Local Standards.” The National and Local Standards referred to in this statutory section are part of the collection financial standards used by the IRS to determine a taxpayer’s ability to pay a delinquent tax, and a debtor must determine allowed expenses according to these standards. They are published on line, and are readily accessible by links from the U.S. Trustee’s website,
and probably from most bankruptcy courts’ websites.
The Local Transportation Standards vary according to the region of the country where the debtor resides. They have two components, one for operating expenses and one for ownership expenses. The “Operating Costs and Public Transportation Costs” table provides numbers depending on whether the debtor owns no car, one car or two cars. The “Ownership Costs” table provides numbers for the debtor’s “first car” and “second car.”
The Trustee argues the Debtor may not claim the “ownership cost” for a car owned free and clear, for a couple of reasons. First, if there is no debt service or lease payment, the expenses incurred by virtue of owning the car are already covered by the “Operating Cost” amount. Second, The Trustee relies on a line of cases that have utilized the IRS’ Internal Revenue Manual or the Internal Revenue Service Collection Financial Analysis Standards
(hereafter collectively the “Manual”) to determine whether a debtor is allowed to take an ownership expense
deduction.
The Manual essentially says that the Ownership Cost is intended to cover debt service or lease payments, and that it functions only as a cap, so that no such expense is to be deducted if the debtor has none.
The analysis must begin, of course, with the language of the statute. If it is clear and unambiguous, the court has
only
to apply it.
Nothing in the statutory language refers to the debtor’s actual transportation expenses of any kind, except for the “Other Necessary Expenses” category. And nothing in the statutory language makes any reference to the Manual. Nor does the statutory language suggest the amounts specified in the Standards are to be used only as máximums, rather than as the expense amounts to be deducted.
To the contrary, the language of § 707(b)(2)(A)(ii)(I) that the “monthly expenses shall be ... the amounts specified” in the Standards states precisely the contrary — that the specified amounts are to be used, rather than that they are limits on a number derived from some other source. Not only would it take at least one more key word for this language to refer to a maximum limit rather than a specified amount, but it would require an additional concept or definition — the amount or number to which that limit should be applied. For the statute to identify one number subject to the maximum limit of another number, it would at least have to instruct the reader how to identify two numbers — the starting number and the limit. This statute only references one number, that derived from the Local Standards. The phrase “the debt- or’s applicable monthly expense amounts specified under the ... Local Standards” references only one number, not two. This structure alone indicates it functions to specify the number to be used, rather than a limit to some other unidentified number.
There being no ambiguity or absurdity in reading the statute to define the number to be used — the number “specified” in the Local Standards' — there does not seem to be any reason to pursue the analysis further.
Nonetheless, some courts have ostensibly found an ambiguity in the word “applicable.” At least a couple of opinions have concluded that the word would be super
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OPINION
RANDOLPH J. HAINES, Bankruptcy Judge.
The issue here is whether § 707(b)(2)(A)(ii)(I) of the Bankruptcy Code
permits a debtor to claim an ownership expense deduction for a vehicle that is owned free and clear of liens, for purposes of determining “the debtor’s projected disposable income” for a Chapter 13 plan. The Court concludes that § 707(b)(2)(A)(ii)(I) allows such a deduction in the amount specified by the Internal Revenue Service (“IRS”) Local Transportation Expense Standards.
Factual Background
Patricia Ann Chamberlain (“Debtor”) has filed a Chapter 13 plan. The Chapter 13 Trustee Edward Maney (“Trustee”) has objected to the plan as not devoting all of the Debtor’s “projected disposable income” to payments to unsecured creditors under the plan, as required by § 1325(b)(1)(A). Because her Current Monthly Income
puts her over the median income for an Arizona family, the “amounts reasonably necessary to be expended”
for her maintenance must be determined in accordance with § 707(b)(2)(A), generally known as the “means test.” Code § 707(b)(2)(A)(ii) provides that the debtor’s “monthly expenses shall be the debtor’s applicable monthly expense amounts specified under the National Standards and Local Standards,
and the debtor’s actual monthly expenses for the categories specified as Other Necessary Expenses issued by the Internal Revenue Service for the area in which the debtor resides.... ”
The Debtor owns a 2000 Chevrolet Cavalier, with 111,000 miles, free and clear of any liens. In determining her expenses, the Debtor listed on Line 28
of Form B22C a $200 Local Standards ownership expense for the vehicle. This was less than the applicable standard, because the IRS Local Ownership Cost for the West Census Region is $471 for the first car and
$332 for the second car.
The Trustee has objected to this expense claim because he maintains that such “ownership expenses” may be claimed only if the car secures a debt (or is leased). He relies on the Internal Revenue Service Collection Financial Standards, which state the “ownership costs provide maximum allowances for the lease or purchase of up to two automobiles.... If a taxpayer has no car payment, ... only the operating cost portion of the transportation standard is used to come up with the allowable transportation expense.”
In order for the Plan to be confirmed, the Trustee has requested the Debtor to increase her disposable monthly income by the $200 vehicle ownership expense deduction. Debtor has responded to the Trustee’s objection by requesting that this Court overrule the Trustee’s objection and allow the $200 vehicle ownership expense deduction, or as a result of this ruling the full $471 Local Transportation Expense Standard.
Analysis
The issue here is the meaning of “expenses shall be the debtor’s applicable monthly expense amounts specified under the National Standards and Local Standards.” The National and Local Standards referred to in this statutory section are part of the collection financial standards used by the IRS to determine a taxpayer’s ability to pay a delinquent tax, and a debtor must determine allowed expenses according to these standards. They are published on line, and are readily accessible by links from the U.S. Trustee’s website,
and probably from most bankruptcy courts’ websites.
The Local Transportation Standards vary according to the region of the country where the debtor resides. They have two components, one for operating expenses and one for ownership expenses. The “Operating Costs and Public Transportation Costs” table provides numbers depending on whether the debtor owns no car, one car or two cars. The “Ownership Costs” table provides numbers for the debtor’s “first car” and “second car.”
The Trustee argues the Debtor may not claim the “ownership cost” for a car owned free and clear, for a couple of reasons. First, if there is no debt service or lease payment, the expenses incurred by virtue of owning the car are already covered by the “Operating Cost” amount. Second, The Trustee relies on a line of cases that have utilized the IRS’ Internal Revenue Manual or the Internal Revenue Service Collection Financial Analysis Standards
(hereafter collectively the “Manual”) to determine whether a debtor is allowed to take an ownership expense
deduction.
The Manual essentially says that the Ownership Cost is intended to cover debt service or lease payments, and that it functions only as a cap, so that no such expense is to be deducted if the debtor has none.
The analysis must begin, of course, with the language of the statute. If it is clear and unambiguous, the court has
only
to apply it.
Nothing in the statutory language refers to the debtor’s actual transportation expenses of any kind, except for the “Other Necessary Expenses” category. And nothing in the statutory language makes any reference to the Manual. Nor does the statutory language suggest the amounts specified in the Standards are to be used only as máximums, rather than as the expense amounts to be deducted.
To the contrary, the language of § 707(b)(2)(A)(ii)(I) that the “monthly expenses shall be ... the amounts specified” in the Standards states precisely the contrary — that the specified amounts are to be used, rather than that they are limits on a number derived from some other source. Not only would it take at least one more key word for this language to refer to a maximum limit rather than a specified amount, but it would require an additional concept or definition — the amount or number to which that limit should be applied. For the statute to identify one number subject to the maximum limit of another number, it would at least have to instruct the reader how to identify two numbers — the starting number and the limit. This statute only references one number, that derived from the Local Standards. The phrase “the debt- or’s applicable monthly expense amounts specified under the ... Local Standards” references only one number, not two. This structure alone indicates it functions to specify the number to be used, rather than a limit to some other unidentified number.
There being no ambiguity or absurdity in reading the statute to define the number to be used — the number “specified” in the Local Standards' — there does not seem to be any reason to pursue the analysis further.
Nonetheless, some courts have ostensibly found an ambiguity in the word “applicable.” At least a couple of opinions have concluded that the word would be super
fluous if it were not intended somehow to reference the debtor’s actual debt service or lease payments capped by the Local Standards amount, because otherwise the statute would read the same without it.
The simple answer is that it references both the region of the country in which the debtor lives and the selection that must be made between the two columns that appear in the Local Standards, one for the first car and one for the second car. If the debtor has only one car, the “applicable” expense is the one found in the first column. It takes a tortured reading to make “applicable” refer to anything else.
Indeed, this analysis suggests some more reasons why the statute dictates the use of the specified amount, rather than using it only as a cap to some other number derived from another source. “Applicable” means “capable of or suitable for being applied.”
This connotes a number that is “applied” to someone or some thing from some external source, not that is derived from the person or thing itself. For example, the “applicable” ticket price for a movie references the schedule of prices that may depend on the moviegoer’s age — it does not refer to the moviegoer’s age. In determining how much to charge, the ticket taker would not ask “And what is your applicable age?” Indeed, imagine how a 12-year old would respond to that question — he would say “What? ?” But he could easily identify the “applicable” ticket price given his actual age of 12. He would simply “apply” the schedule of prices to that age.
An internally generated number such as a person’s age or expenses is not “applicable” to that person because it is not in any sense “applied.” But there may well be an external schedule that defines an applicable number, such as a price or a tax rate, that depends on the category in which the person’s internally generated numbers fall. The “applicable” number is then the one specified in the schedule, not the person’s own individual number.
Moreover, “applicable” is an adjective that modifies the “amounts specified” in the Standards. It does not modify “debt- or’s monthly expenses,” which appears at the beginning of § 707(b)(2)(A)(ii)(I). The adjective functions to narrow the reference to “amounts specified”; it does not refer to, modify nor restrict the debtor’s actual monthly expenses. Thus the “amounts specified” by the Local Standards are narrowed according to where the debtor lives and how many cars she owns.
The fact that the phrase “actual” monthly expenses is used in the same clause as “applicable” also suggests that Congress did not mean “applicable” to be “actual.” Statutes must be read in their entirety and not interpreted based on isolated phrases.
The court must consider the next phrase where the term “actual” refers to “Other Necessary Expenses.” 11 U.S.C. § 707(b)(2)(A)(ii)(I). Since Congress used “actual” to modify a different expense in the same provision, it would make little sense to interpret “actual” and “applicable” as meaning the same thing. The Court is not convinced the word would
have been selected to denote “actual subject to a maximum cap,” as at least one opinion has suggested.
Instead, the more logical conclusion is that Congress used two different terms to achieve two different results.
Although a number of opinions have relied on Internal Revenue Service publications for an interpretation of the relevant provision,
this Court concludes there is no basis to do so. Nothing in the statute, Bankruptcy Rules or official forms refers a debtor to any IRS publications for additional rules or interpretation.
The IRS is not an administrative agency that administers the Bankruptcy Code, so there is no basis for a Court to defer to its administrative expertise.
In § 707(b) Congress adopted the Standards, not other IRS publications interpreting or applying them. Nor did it instruct courts to allow expense deductions in the amount an IRS field agent would allow in deciding whether to settle a tax debt for less than the amount owed, sort of an Erie-type guess as to what another entity would conclude.
Congress’ use of the word “specified” could not be much clearer in indicating the Standards govern, not what the IRS would allow.
Indeed, the language of the IRS Manual provides two additional reasons why § 707(b) should not be interpreted as the Trustee urges. First, the fact that the IRS had to make that explanation in the Manual indicates its recognition that the Standards themselves do not indicate they impose máximums, and are not to be used if the debtor has no debt service on the vehicle. Second, the language of the Manual provided a model that Congress could easily have adopted if that were its intent. Congress’ choice not to use the language of the Manual implies that it did not intend the same result.
The Court therefore concludes that the language of § 707(b) requires the amounts specified in the Standards to be used, for the debtor’s region and the number of cars owned. And since the Court finds no am
biguity in this language, there is no need to resort to legislative history.
A number of opinions have identified illogical or unfair results that might occur under the various proposed interpretations of the language.
None of these, however, reaches the level of the absurd — something no rational person could have intended, or a result demonstrably at odds with the fundamental purpose of the legislation.
Each of the proposed interpretations has a rational basis and is consistent with the apparent fundamental purposes of BAPCPA, to limit the allowable expenses, to achieve greater uniformity in the application of § 707(b), and to limit judicial and trustee discretion. Consequently the choice between possible interpretations should be guided primarily by the language Congress chose rather than by which interpretation this Court believes would achieve reasonable and fair results the greater percentage of the time.
Conclusion
For the foregoing reasons, the Court concludes debtors may use the Ownership Costs specified by the Local Standards regardless of whether the vehicle secures a debt. The Trustee’s objection to the Debt- or’s plan on that basis is overruled.