- 13 -
When petitioner filed the 1994 joint tax return, on October
16, 1995, both petitioner and Mary intended to file a 1994 joint
tax return.
C. The Bankruptcy Proceeding
On December 18, 1997, petitioner filed a petition for
bankruptcy under chapter 13 of the Bankruptcy Code in the U.S.
Bankruptcy Court for the District of Maryland, Southern Division.
Petitioner’s case was later converted to a case under chapter 7.
Laura J. Margulies (hereinafter sometimes referred to as
Margulies), a bankruptcy attorney, represented petitioner in that
bankruptcy case.
Respondent6 filed claims for taxes, including claims for
income taxes for 1988, 1989, 1990, 1991, and 1994, in
petitioner’s Bankruptcy Court proceeding.
Petitioner objected to respondent’s claim. As to 1994, he
contended that he did not have any tax liability, that he had
overpaid his 1994 taxes by $54,729, and that this overpayment had
already been applied to his 1988 tax liability. Petitioner
argued in the bankruptcy case that income received from NHP in
1994 and the disability payments from Metro-Life were excludable
from gross income under the provisions of section 104(a)(2). The
Bankruptcy Court conducted a hearing on respondent’s claims and
6For simplicity and ease, we use the term respondent to
include the U.S. Government, which was the party in the
bankruptcy action.
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