A debtor seeking recovery of damages, fees, or costs from the IRS in connection with a discharge injunction violation must first exhaust administrative remedies as required by the Internal Revenue Code. In re Thal, No. 09-12434, In re Slattery, No. 11-20554, 2018 Bankr. LEXIS 1308 (Bankr. S.D. Fla. May 8, 2018).
The chapter 13 debtors, Lucy Thal and Robert Slattery, filed plans in their separate bankruptcy cases under which they paid priority IRS tax debts in full and treated their remaining tax liability as general unsecured debt. Both debtors completed their plans and obtained discharges. Nonetheless, after discharge, the IRS sent both debtors levy notices. It also intercepted a portion of Ms. Thal’s social security benefits, which it later returned, and Mr. Slattery’s tax refunds, which it did not return. In both cases, the debtors filed motions for contempt for violation of the discharge injunction. Read More
