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confirmed plan. The debtor argued that the principles of res
judicata and equitable estoppel prohibited the Commissioner from
assessing additional tax for 1986.
The provisions of a confirmed plan generally bind the debtor
and the creditors whether or not the debtor’s claim or interest
is impaired under the plan and irrespective of whether the debtor
has accepted the plan. 11 U.S.C. sec. 1141 (2000). Excepted
from discharge under 11 U.S.C. sec. 1141, however, are any debts
outlined in 11 U.S.C. sec. 523 (2000). The court in In re
DePaolo, supra at 375, held that a confirmed plan does not
discharge an individual debtor from any tax debt within the
purview of 11 U.S.C. sec. 507(a)(7) (now 11 U.S.C. sec.
507(a)(8)), whether or not a claim for such tax was filed or
allowed. The court in In re DePaolo, supra, opined:
While principles of res judicata apply generally
to bankruptcy proceedings, the plain language of 1141
and 523 forbid the application of those principles to
the facts of this case. By expressly providing that
the described taxes are not discharged “whether or not
a claim for such taxes was filed or allowed,” 11 U.S.C.
523(a)(1)(A)(emphasis added), Congress has determined
that the IRS may make a claim for taxes for a
particular year in a bankruptcy proceeding, accept the
judgment of the bankruptcy court, then audit and make
additional claims for that same year, even though such
conduct may seem inequitable or may impair the debtor’s
fresh start. * * * “although allowing the IRS to
pursue its claim after the confirmation and
consummation of a Chapter 11 plan admittedly conflicts
with the ‘fresh start’ policy animating the
[Bankruptcy] Code’s discharge provisions, ‘it is
apparent to us that Congress has made the choice
between collection of revenue and rehabilitation of the
debtor by making it extremely difficult for a debtor to
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