- 4 -
determination from that court that she was not liable for the
taxes and addition to taxes at issue solely because she was an
"innocent spouse" under section 6013(e) and section 6004 of the
Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100-647,
102 Stat. 3342, 3685.
On August 12, 1993, the bankruptcy court issued a
"Memorandum Opinion Regarding Sharon N. Freytag's Objection to
IRS Claim". The court stated that it could "find no reason why
it would be inequitable to hold Sharon liable for the
consequences of the understatements." It accordingly decided
that Mrs. Freytag was liable for the taxes for 1981 and 1982 and
could not rely successfully upon the "innocent spouse" defense.
On May 31, 1994, the bankruptcy court entered an "Agreed Order
Pertaining to Dischargeability" in which it discharged: (1)
Penalties and interest on penalties claimed by the IRS for the
Freytags' taxable years 1978-1982; (2) penalty interest imposed
by section 6621(c) to the extent it exceeded the normal rate of
interest; and (3) $5,000 in tax and $10,941.89 in interest for
the year 1978. With regard to the amounts not discharged, the
parties seem to agree that while no dollar amount was stated in
the order, the amount of the tax debts for 1981 and 1982 could be
determined by reference to that order and the proof of claim, as
amended, for the years at issue in this case.
In view of the bankruptcy court's order of discharge, this
Court lifted the stay of proceedings. On August 20, 1996,
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011