[PUBLISH]
\ IN THE UNITED STATES COURT OF APPEALS FILED FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS ___________________________ ELEVENTH CIRCUIT MAR 23 2001 No. 00-13404 THOMAS K. KAHN CLERK ___________________________
D.C. Docket No. 99-01447-CV-J-NE
IN RE: W. DAVID FRETZ,
Debtor.
UNITED STATES OF AMERICA,
Plaintiff-Appellant,
versus
W. DAVID FRETZ,
Defendant-Appellee.
____________________________
Appeal from the United States District Court for the Northern District of Alabama ____________________________
(March 23, 2001)
Before EDMONDSON, CARNES and MARCUS, Circuit Judges. CARNES, Circuit Judge:
This appeal brings us the issue of whether a debtor’s intentional failure to
file tax returns and to pay taxes owed to the Internal Revenue Service (“IRS”) is
sufficient, even without any supporting affirmative conduct, to show that he
“willfully attempted in any manner to evade or defeat [a] tax,” within the meaning
of the non-discharge provision contained in 11 U.S.C. § 523(a)(1)(C), which is part
of the Bankruptcy Code. We hold that it is.
I. BACKGROUND
A. FACTS1
From 1982 through 1992 William David Fretz failed to file federal income
tax returns or to pay his taxes. His problems with alcoholism during that time
period caused a severe downward spiral in his life. Notwithstanding that, Dr. Fretz
managed to maintain his employment as a physician; indeed, he worked shifts of
between twelve and twenty-four hours in hospital emergency rooms. Although he
never drank within eight hours before a shift, upon completing work he would
drink massive amounts of vodka until he passed out. Dr. Fretz eventually joined
1 The historical facts we set out in this section of the opinion are pretty much undisputed. To the extent of any dispute, we have taken the version of the facts found by the bankruptcy court (after an evidentiary hearing) because those findings are not clearly erroneous.
2 Alcoholics Anonymous, regained control of his life, and quit drinking. The exact
day he stopped drinking was April 15, 1993.2
Before 1982, Dr. Fretz worked in a clinic and was paid as a salaried
employee, and his employer withheld income taxes from his paychecks as it was
required to do. From 1982 through 1992, however, Dr. Fretz worked at several
hospitals and clinics as an independent contractor. Because he was no longer a
salaried employee, no income taxes were withheld from his paychecks during that
period. The hospitals and clinics dutifully filed Forms 1099 reporting the
payments they made to Dr. Fretz, but he did not dutifully do anything about his
income tax responsibilities. He did not make his required estimated tax payments
in any of those years. Not once. And he did not file his annual returns or pay any
income tax. None. In 1986 Dr. Fretz did hire an accountant to prepare a tax return
for him, but he never filed it. On the other hand, Dr. Fretz never attempted to
move his assets around or otherwise conceal them (except to the extent that failing
to file returns conceals assets).
2 As the thoughtful reader might surmise, it was not merely coincidental that Dr. Fretz, who had not filed tax returns or paid income taxes for a decade, stopped drinking on April 15. Dr. Fretz testified that he knew he would eventually be called to account for failing to pay his taxes, and that it weighed so heavily on him that he contemplated committing suicide. As he explained about his decision to stop drinking on “tax day”: “I picked the date so that I would be continuously reminded throughout my sobriety of the harm that I had done to myself during the drinking years and the pain that it had caused so that I would never ever be tempted to go back and drink again.”
3 The day of reckoning Dr. Fretz always knew would come finally arrived in
March of 1990 when he received a letter from the IRS stating that it had no record
of receiving returns from him for 1982 through 1988. One thing led to another and
eventually to criminal charges. In January of 1994, Dr. Fretz pleaded guilty to one
criminal charge, which was willful failure to file a tax return for the 1988 taxable
year, in violation of 26 U.S.C. § 7203. In November of 1994, he signed returns
prepared by the IRS for the 1982 through 1992 tax years. Included in the penalties
to which he consented were civil fraud penalties for 1982 through 1988, as
authorized in 26 U.S.C. § 6653(b), and civil penalties for fraudulent failure to file
for 1989 through 1992, as authorized in 26 U.S.C. § 6651(a) and (f).
The amount of Dr. Fretz’ tax liability, including the calculation of the
interest and penalties, is not the issue in this case. The issue, instead, is whether
his liability for those taxes, interest, and penalties is a debt that is dischargeable in
bankruptcy.
B. PROCEDURAL HISTORY
In June of 1997 Dr. Fretz filed a petition under Chapter 7 of the Bankruptcy
Code. The next month he filed a complaint seeking to discharge his federal income
tax liability for all tax years from 1982 through 1992, except for 1988. The
government filed not only an answer denying that Dr. Fretz was entitled to be
4 discharged from liability for the tax years cited in his complaint, but it also filed a
counterclaim asserting its position that his liability for the 1988 taxable year also
was not dischargeable.3 The total amount of taxes, interest, and penalties for which
Dr. Fretz sought discharge exceeded $1 million at the time he filed his complaint.
The government argued that Dr. Fretz’ tax liabilities for 1982 through 1992 were
nondischargeable pursuant to 11 U.S.C. § 523(a)(1)(C) because he had willfully
attempted to evade or defeat those taxes within the meaning of that provision.4
The bankruptcy court held that the taxes for the years in issue were
dischargeable. In its memorandum opinion the court ruled that the government had
the burden of proving by a preponderance of the evidence that Dr. Fretz’ failure to
pay taxes was committed with fraudulent intent. Because of Dr. Fretz’ alcoholism,
the court believed that he had followed no “scheme or design” to evade his taxes.
Ultimately, the court concluded “that Dr. Fretz’ conduct did not contain sufficient
3 In connection with his guilty plea for willfully failing to file a return for 1988, Dr. Fretz had made payments pursuant to an order of restitution. He thought that those restitution payments had been applied to his liability for the 1988 tax year, which is why he did not seek to have that liability discharged in the bankruptcy proceeding. Apparently, however, the IRS had applied those restitution payments to Dr. Fretz’ liability for earlier tax years, which is why it counterclaimed about the 1988 tax year liability. Regardless of how it got into the pleadings, the dischargeability of the 1988 tax year liability is part of this case. The issues involving it are the same as those involving the other tax years. 4 The government’s counterclaim against Dr. Fretz also asserted that his federal income tax liability for the 1993 tax year is nondischargeable. Dr. Fretz conceded this issue in the bankruptcy court, apparently because he claimed a deduction that would eliminate his tax liability for that year, thereby making the dischargeability of it academic.
5 aggravating circumstances to raise the late filing of returns and failure to pay to the
level of willfulness that would make the debt at issue nondischargeable.”
The government appealed to the district court, which affirmed the
bankruptcy court. In its memorandum opinion the district court found the issue
and facts in Dr. Fretz’ case to be “virtually indistinguishable” from those of In re
Haas, 48 F.3d 1153 (11th Cir. 1995), abrogated in part, In re Griffith, 206 F.3d
1389, 1395-96 (11th Cir. 2000) (en banc), where we held that a debtor who
accurately filed his tax returns but intentionally failed to pay taxes did not fit
within the exception to dischargeability provided in § 523(a)(1)(C). The district
court held that because intent was the determinative factor and Dr. Fretz did not
engage in any affirmative acts to avoid his taxes, there was no willful attempt to
evade or defeat taxes within the meaning of § 523(a)(1)(C). The government
appealed.
II. DISCUSSION
We review the bankruptcy court's factual findings under the clearly
erroneous standard. General Trading Inc. v. Yale Materials Handling Corp., 119
F.3d 1485, 1494 (11th Cir. 1997). By contrast, conclusions of law, whether from
the bankruptcy court or the district court, we review de novo. Id.
A debtor under Chapter 7 of the Bankruptcy Code is generally granted a
6 discharge from all debts that arose prior to the filing of the bankruptcy petition. 11
U.S.C. § 727(b). Nonetheless, this “fresh start” policy is only available to the
“honest but unfortunate debtor.” Grogan v. Garner, 498 U.S. 279, 286-87, 111 S.
Ct. 654, 659 (1991) (quoting Local Loan Co. v. Hunt, 292 U.S. 234, 244, 54 S. Ct.
695, 699 (1934)). To ensure that, Congress provided several exceptions to the
general rule of discharge. One of those exceptions, and the one at play in this case,
is contained in § 523(a)(1)(C), which provides, in relevant part:
(a) A discharge under § 727 . . . of this title does not discharge an individual debtor from any debt– (1) for a tax or a customs duty– * * * (C) with respect to which the debtor made a fraudulent return or willfully attempted in any manner to evade or defeat such tax. . .
11 U.S.C. § 523(a)(1)(C). As we have noted before, “[t]he Government bears the
burden to prove, by a preponderance of the evidence, that a particular claim is
nondischargeable under § 523(a).” In re Griffith, 206 F.3d 1389, 1396 (11th Cir.)
(en banc) (citing Grogan, 498 U.S. at 287-88, 111 S. Ct. at 659-60), cert. denied,
___ U.S. ___, 121 S. Ct. 73 (2000).
Dr. Fretz did not file tax returns for the years in question until November of
1994 when he signed returns that had been prepared by the IRS. So, we are not
concerned with the first part of § 523(a)(1)(C), which is aimed at a debtor who has
7 “made a fraudulent return,” but only with the second part, which is aimed at one
who has “willfully attempted in any manner to evade or defeat” his income taxes.
Exceptions to the general rule of discharge, such as § 523(a)(1)(C), are to be
strictly construed in favor of the debtor. Griffith, 206 F.3d at 1394; In re Fegeley,
118 F.3d 979, 983 (3d Cir. 1997); Dalton v. I.R.S., 77 F.3d 1297, 1300 (10th Cir.
1996). But that rule of strict construction does not permit or require that an
unambiguous provision be construed contrary to the plain meaning of its terms. To
the contrary, we are required to interpret straightforward, unambiguous language in
the Bankruptcy Code, like that in all other statutes, according to its plain meaning.
See United States v. McLymont, 45 F.3d 400, 401 (11th Cir. 1995) ( "[T]he plain
meaning of the statute controls unless the language is ambiguous or leads to absurd
results.") (citation omitted); see also In re American Steel Product, Inc., 197 F.3d
1354, 1356 (11th Cir. 1999) (“It is well-settled that courts are required to apply the
plain meaning canon of statutory construction in interpretation of the Bankruptcy
Code.”). When statutory language has not been expressly defined, we are to give
that language its common meaning. Consolidated Bank, N.A. v. United States
Dep’t of Treasury, 118 F.3d 1461, 1464 (11th Cir. 1997) (“In the absence of a
statutory definition of a term, we look to the common usage of words for their
meaning.”). The plain language of the second prong of § 523(a)(1)(C) contains a
8 conduct requirement (that the debtor “attempted in any manner to evade or defeat
[a] tax”), and a mental state requirement (that the attempt was done “willfully”).
See Fegeley, 118 F.3d at 983; In re Birkenstock, 87 F.3d 947, 951 (7th Cir. 1996).
We turn now to a closer look at those two requirements to see if the government
carried its burden of establishing that the § 523(a)(1)(C) exception applies in this
case.
1. The Conduct Requirement
We begin our closer look with the conduct requirement, remembering that
“Congress did not define or limit the methods by which a willful attempt to defeat
and evade might be accomplished and perhaps did not define lest its effort to do so
result in some unexpected limitation.” Dalton, 77 F.3d at 1301 (quoting Spies v.
United States, 317 U.S. 492, 499, 63 S. Ct. 364, 368 (1943)); see also Fegeley, 118
F.3d at 983. Dr. Fretz argues that the outcome in this case is controlled by our
decision in In re Haas, 48 F.3d 1153 (11th Cir. 1995), abrogated in part, In re
Griffith, 206 F.3d 1389, 1395-96 (11th Cir. 2000) (en banc). In that case, we
considered a debtor who had filed accurate returns but had not paid his taxes, and
held that simply failing to pay taxes is not enough to satisfy § 523(a)(1)(C)’s
conduct requirement. Haas, 48 F.3d at 1158 (“[A] debtor’s failure to pay his taxes,
9 alone, does not fall within the scope of section 523(a)(1)(C)’s exception to
discharge in bankruptcy.”).
We noted in Haas that a reading of § 523(a)(1)(C) in isolation, and
especially the broad phrase “in any manner,” might lead to the conclusion that
simply failing to pay taxes was within the scope of the nondischargeability
provision. Id. at 1155-56. But we also noted that other provisions contained in the
Internal Revenue Code referred to “willfully attempting in any manner to evade or
defeat any tax or the payment thereof.” See id. (quoting 26 U.S.C. § 6531(2)); see
also id. (quoting nearly identical language contained in 26 U.S.C. §§ 6653, 6672,
& 7201). Drawing from that comparison, we concluded:
The omission of the words “or the payment thereof” from section 523(a)(1)(C), in light of Congress’s previous inclusion of these words on four previous occasions, indicates that Congress did not intend that a failure to pay taxes, without more, should result in the nondischargeability of a debtor’s tax liabilities in bankruptcy.
Id. at 1157. Most of the other circuits that have examined this issue agree that a
simple failure to pay taxes does not satisfy § 523(a)(1)(C)’s conduct requirement.
See Fegeley, 118 F.3d at 983 (agreeing with Haas that nonpayment of taxes is not
sufficient to satisfy the conduct requirement, but nonpayment is “relevant evidence
which [we] should consider in the totality of conduct to determine whether or not
the debtor willfully attempted to evade or defeat taxes”) (citation and internal
10 marks omitted, alteration in original); Birkenstock, 87 F.3d at 951 (same); Dalton,
77 F.3d at 1301 (same); but see In re Bruner, 55 F.3d 195, 200 (5th Cir. 1995)
(rejecting reasoning of Haas and holding that “[s]ection 523(a)(1)(C) surely
encompasses both acts of commission as well as culpable omissions”). In any
event, that part of Haas is still the law of this circuit.
We did go even further in Haas, however, and, distinguishing between the
assessment of taxes on one hand, and the payment or collection of taxes on the
other, reached a second holding: that § 523(a)(1)(C) did not cover attempts to
evade or defeat the payment or collection of taxes. Haas, 48 F.3d at 1159 (“[T]he
phrase ‘attempt[s] in any manner to evade or defeat such tax’ does not imply
attempts to evade or defeat payment thereof.”). That part of Haas is no longer the
law in this circuit, however, because we overturned it in In re Griffith, 206 F.3d
1389 (11th Cir.) (en banc), cert. denied, ___ U.S. ___, 121 S. Ct. 73 (2000).
Griffith involved a debtor who had not attempted to evade or defeat the
assessment of any tax, but he had engaged in intra-family transfers of property for
insufficient consideration in an attempt to avoid paying income taxes. Taking to
heart the criticism by several circuits of our second holding in Haas, we overturned
it and held that § 523(a)(1)(C) precludes discharge when the debtor “willfully
attempted . . . to evade or defeat” a tax at the payment stage, just as surely as it
11 does where the attempted evasion occurs at the assessment stage. Griffith, 206
F.3d at 1393, 1395-96.
That holding in Griffith was based in part on the reasoning that a contrary
interpretation of § 523(a)(1)(C) permitting a debtor to evade the collection of taxes
would not serve the balance that section strikes between the “fresh start” policy
and the policy of preventing tax evasion; it would only give an advantage to
dishonest debtors. Id. at 1395 (citation omitted). Additionally, we recognized that
if § 523(a)(1)(C) was read as being inapplicable to attempts to evade payment or
collection of taxes, the result would be that the statutory language “willfully
attempted in any manner to evade or defeat taxes” would apply only in cases where
a fraudulent return was filed; that situation, however, is already covered by the first
part of § 523(a)(1)(C). Id. For these reasons, we held in Griffith that §
523(a)(1)(C) renders a tax debt nondischargeable where the debtor willfully
attempted to evade or defeat the payment of the tax, even though the debtor did not
attempt to evade or defeat the assessment of the tax. Id. at 1396-97.
To summarize, as the law of this circuit now stands, the conduct requirement
of § 523(a)(1)(C) is not satisfied where a debtor has filed accurate tax returns and
simply failed to pay taxes as the debtor in Haas did. 48 F.3d at 1157 (“The
omission of the words ‘or the payment thereof’ from section 523(a)(1)(C) . . .
12 indicates that Congress did not intend that a failure to pay taxes, without more,
should result in the nondischargeability of a debtor’s tax liabilities in
bankruptcy.”). The conduct requirement is satisfied, however, where a debtor
engages in affirmative acts to avoid payment or collection of taxes as the debtor in
Griffith did. 206 F.3d at 1393-96. Dr. Fretz argues that he has simply failed to pay
his taxes and, according to our decisions in Haas and Griffith, that is not enough to
render his tax liability nondischargeable.
We disagree. We have never had a § 523(a)(1)(C) case involving a debtor
who not only failed to pay taxes but also failed to file tax returns. That is not the
situation presented in either Haas or Griffith. Dr. Fretz argues that Haas fits, but
his failure to file returns distinguishes his situation from that of the debtor in Haas
who did file returns each year, as required. See 48 F.3d at 1154. All that Haas
establishes is that the failure to pay taxes, without more, does not bar discharge of
tax debts.
Likewise, Griffith is not controlling either, except it does establish that at
least where the debtor engaged in affirmative acts designed to evade payment, §
523(a)(1)(C) applies to bar discharge, even if there was no attempt to evade
assessment of tax. The Griffith decision speaks of affirmative acts, because in that
case there were affirmative acts (transfers of property for less than fair
13 consideration) undertaken in the attempt to evade payment or collection of taxes.
Griffith stands foursquare for the proposition that affirmative acts of evasion are
sufficient, but it does not stand foursquare or otherwise for the proposition that
affirmative acts are required. Put another way, Griffith did not hold – and because
the facts of that case did not present the issue, it could not have held – that acts of
omission alone cannot constitute an attempt in any manner to evade or defeat a tax
within the meaning of § 523(a)(1)(C).
Although we have not previously faced the omission only issue presented in
this case, the Third and Sixth Circuits have. Each of those circuits have held that
omitting to file tax returns, when coupled with the failure to pay taxes, does satisfy
the conduct requirement of § 523(a)(1)(C). See In re Fegeley, 118 F.3d 979, 984
(3d Cir. 1997) (“Fegeley’s intentional failure to file his tax returns, together with
his failure to pay taxes when he had the resources to do so, was sufficient to prove
that he attempted to evade or defeat his tax liabilities.”); In re Toti, 24 F.3d 806,
809 (6th Cir. 1994) (“[F]ailure to file a tax return and failure to pay a tax fall
within the definition in § 523(a)(1)(C) of a willful attempt to evade or defeat a tax
liability.”). We think that the Third and Sixth Circuits got it right.
Section 523(a)(1)(C) does not contain an affirmative conduct requirement.
Insofar as conduct is concerned, the plain statutory language simply requires that
14 the debtor have “attempted in any manner to evade or defeat [a] tax.” §
523(a)(1)(C). We agree with the other two circuits that the modifying phrase “in
any manner” means what it says and covers attempts to evade or defeat a tax
whether accomplished by “acts of culpable omission [or] acts of commission.”
Fegeley, 118 F.3d at 983 (citations omitted); accord Toti, 24 F.3d at 809 (“a plain
reading of § 523(a)(1)(C) includes both acts of commission and acts of omission”).
Our conclusion in this respect is supported by a number of prior decisions of
this Court and the Supreme Court holding that the well-established meaning of the
word “any” is all; not just some, but all. Merritt v. Dillard Paper Co., 120 F.3d
1181, 1186 (11th Cir. 1997) (where “‘Congress did not add any language limiting
the breadth of that word,’ . . . ‘any’ means all.”) (quoting United States v.
Gonzales, 520 U.S. 1, 5, 117 S. Ct. 1032, 1035 (1997)); id. at 1186 (“the adjective
‘any’ is not ambiguous; it has a well-established meaning”); see also Lyes v. City
of Riviera Beach, 166 F.3d 1332, 1337 (11th Cir. 1999) (en banc) (same); United
States v. Castro, 837 F.2d 441, 445 (11th Cir. 1988) (concluding that “any” meant
“every” or “all”).
Our holding that acts of omission designed to evade payment or collection of
taxes are sufficient to satisfy § 523(a)(1)(C) is also supported by our reasoning in
Griffith, where we explained that we “disfavor interpretations of statutes that
15 render language superfluous,” and “that courts have traditionally been reluctant to
limit the means by which a taxpayer may ‘willfully attempt in any manner to evade
or defeat’ taxes.” 206 F.3d at 1395 (citations omitted). An interpretation of §
523(a)(1)(C) which covered only acts of commission and not culpable acts of
omission would limit the means by which a taxpayer may be found to have
willfully attempted to evade or defeat taxes, and it would tend to make the
modifying phrase “in any manner” superfluous. For all of these reasons, we hold §
523(a)(1)(C) covers both acts of commission and acts of omission. Dr. Fretz’
failure to file tax returns, coupled with his failure to pay his taxes, satisfy the
conduct requirement of § 523(a)(1)(C).5
2. The Mental State Requirement
As for the mental state requirement, a debtor’s attempt to avoid his tax
liability is considered willful under § 523(a)(1)(C) if it is done voluntarily,
consciously or knowingly, and intentionally. See Griffith, 206 F.3d at 1396-97; In
re Tudisco, 183 F.3d 133, 137 (2d Cir. 1999); Fegeley, 118 F.3d at 984;
Birkenstock, 87 F.3d at 952; Dalton, 77 F.3d at 1302; Toti, 24 F.3d at 809.
5 The reporting of Dr. Fretz’ income to the IRS on Forms 1099 does not preclude a finding that he “attempted in any manner to evade or defeat [a] tax.” His employers, not Dr. Fretz, filed those forms with the IRS. That fact does not say anything about whether Dr. Fretz himself “attempted in any manner to evade or defeat [a] tax.” It only indicates that his attempt had little chance of succeeding.
16 Fraudulent intent is not required. Fegeley, 118 F.3d at 984 (rejecting debtor’s
contention that “willfulness language in the second prong of § 523(a)(1)(C) should
be interpreted consistently with the criminal provisions of the Internal Revenue
Code, and that ‘proof of fraud is a necessary element of [that prong]’”) (alteration
in original). Thus, all the government must prove is that Dr. Fretz:
(1) had a duty to file income tax returns and pay taxes;
(2) knew he had such a duty; and
(3) voluntarily and intentionally violated that duty.
See Griffith, 206 F.3d at 1396; Fegeley, 118 F.3d at 984. The first two
components are not really at issue in this case. The real issue is about the third
one. The third or willfulness component of the mental state requirement “prevents
the application of the exception to debtors who make inadvertent mistakes,
reserving nondischargeability for those whose efforts to evade tax liability are
knowing and deliberate.” Birkenstock, 87 F.3d at 952.
We reject Dr. Fretz’ contention that “[t]he United States’ argument that late
filing of returns establishes willfulness under subsection (C) effectively would
eliminate the 2-year time limit of subsection (B) from the Bankruptcy Code.” He
is referring to § 523(a)(1)(B), which provides:
(a) A discharge under § 727 . . . of this title does not discharge an individual debtor from any debt–
17 (1) for a tax or a customs duty– * * * (B) with respect to which a return, if required–
(i) was not filed; or
(ii) was filed after the date on which such return was last due, under applicable law or under any extension, and after two years before the date of the filing of the petition. . .
11 U.S.C. § 523(a)(1)(B). Even assuming that the returns Dr. Fretz signed that had
been prepared by the IRS constitute late-filed returns for the purposes of §
523(a)(1)(B)(ii), the government’s argument does not, as he suggests, eliminate
discharge for debtors who file late returns. A debtor who simply files returns after
they are due but at least two years before filing a bankruptcy petition can still
obtain a discharge if he has not also attempted to evade or defeat the tax, within the
meaning of § 523(a)(1)(C), as can a debtor who filed returns late due to mistake,
inadvertence, or an honest misunderstanding of the tax laws. In any event,
questions involving the late-filed returns in this case go to the conduct requirement
of § 523(a)(1)(C) – whether the debtor attempted to evade or defeat the tax – and
not to the mental state requirement, as Dr. Fretz seems to believe.
It is undisputed that Dr. Fretz had a duty to pay taxes and that he was aware
of that duty. Indeed, he testified that he suffered mentally and emotionally
throughout the years in question because of his awareness that he was failing to file
18 returns and pay taxes as he knew he was required to do. He said that he was
always mindful of his duty to pay taxes, and it weighed so heavily upon him that
the IRS became the focus of his life. There is no evidence that Dr. Fretz’ failure to
file returns and pay taxes during these years was due to inadvertence or mistake;
indeed, his own testimony rules out that possibility. As a practicing emergency
room physician, he had the means to pay his taxes, and he had the ability either to
file his tax returns himself or to engage an accountant to file the returns for him.
Put bluntly, someone who can control his drinking enough to perform medical
procedures during twelve- to twenty-four hour shifts in an emergency room over a
period of years, can control his drinking enough to file tax returns and pay taxes
during that same period. Instead of doing that, as Dr. Fretz himself put it, he “just
totally ignored” his tax responsibilities. He chose to ignore them, just as he chose
not to ignore his emergency room responsibilities. Under these circumstances, the
finding that Dr. Fretz’ attempt to evade or defeat his tax liability was not willful is
clearly erroneous.
III. CONCLUSION
For the foregoing reasons, we hold that Dr. Fretz’ tax debts for the years in
question fall within the scope of § 523(a)(1)(C), and therefore are not
dischargeable in bankruptcy.
19 REVERSED.