{
  "id": 2568159,
  "name": "ELLIS M. ROSENFELD et al., Plaintiffs-Appellants, v. THE DEPARTMENT OF REVENUE, Defendant-Appellee",
  "name_abbreviation": "Rosenfeld v. Department of Revenue",
  "decision_date": "1990-10-23",
  "docket_number": "No. 1-88-3033",
  "first_page": "427",
  "last_page": "430",
  "citations": [
    {
      "type": "official",
      "cite": "205 Ill. App. 3d 427"
    }
  ],
  "court": {
    "name_abbreviation": "Ill. App. Ct.",
    "id": 8837,
    "name": "Illinois Appellate Court"
  },
  "jurisdiction": {
    "id": 29,
    "name_long": "Illinois",
    "name": "Ill."
  },
  "cites_to": [
    {
      "cite": "11 U.S.C. \u00a7523",
      "category": "laws:leg_statute",
      "reporter": "U.S.C.",
      "year": 1988,
      "pin_cites": [
        {
          "page": "(a)(l)(B)(i)"
        }
      ],
      "opinion_index": 0
    },
    {
      "cite": "11 U.S.C. \u00a7\u00a7507",
      "category": "laws:leg_statute",
      "reporter": "U.S.C.",
      "pin_cites": [
        {
          "page": "(a)(7)(A)"
        }
      ],
      "opinion_index": 0
    }
  ],
  "analysis": {
    "cardinality": 360,
    "char_count": 6954,
    "ocr_confidence": 0.77,
    "sha256": "896e33f6c1f457514d00feb7b8823475157a51e365e14dccac5514737f64f9d2",
    "simhash": "1:d1a2b7915837c45b",
    "word_count": 1152
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  "last_updated": "2023-07-14T21:56:36.258665+00:00",
  "provenance": {
    "date_added": "2019-08-29",
    "source": "Harvard",
    "batch": "2018"
  },
  "casebody": {
    "judges": [],
    "parties": [
      "ELLIS M. ROSENFELD et al., Plaintiffs-Appellants, v. THE DEPARTMENT OF REVENUE, Defendant-Appellee."
    ],
    "opinions": [
      {
        "text": "JUSTICE SCARIANO\ndelivered the opinion of the court:\nPlaintiffs Ellis Rosenfeld (Ellis) and Phyllis Rosenfeld (collectively, plaintiffs) sought to enjoin the Department of Revenue (the State) from continuing to garnish Ellis\u2019 wages in order to satisfy two judgments against him for taxes due the State under the Retailers\u2019 Occupation Tax Act (Ill. Rev. Stat. 1989, ch. 120, par. 440 et seq.) (the Act). Plaintiffs claim that because their debts were discharged in bankruptcy under 11 U.S.C. section 727 (1981) after the State obtained its judgments, the judgments were also discharged, and the State can therefore be enjoined from continuing to garnish Ellis\u2019 wages. The circuit court dismissed plaintiffs\u2019 complaint on the ground that it failed to state a cause of action. Plaintiffs appeal.\nPlaintiff Ellis Rosenfeld was involved in two businesses in Illinois from 1972 until June 15, 1976, as a result of which he incurred, pursuant to the Act, a tax liability which was due on or before July 15, 1976. Because he failed to file the returns required by section 3 of the Act (Ill. Rev. Stat. 1975, ch. 120, par. 442), or to pay the tax, the State instituted collection proceedings and obtained two judgments against him in August 1980, totaling $35,320.75.\nPlaintiffs filed for bankruptcy protection on September 2, 1980, in which proceeding the bankruptcy court ordered them discharged from all \u201cdischargeable debts\u201d pursuant to 11 U.S.C. section 727 (1981), on January 7, 1981. After such discharge, the State caused three different notices of \u201cLevy on Wages, Salary and Other Income of Ellis Rosenfeld\u201d to be served on his employer in accordance with section 5f of the Act (Ill. Rev. Stat. 1985, ch. 120, par. 444f), requiring the employer to turn over to the State certain income earned by Ellis, in order to satisfy the judgments of tax liability.\nPlaintiffs filed a complaint for mandatory injunction against the State on June 15, 1987, in the circuit court of Cook County, seeking to enjoin any further attempts by the State to satisfy the judgments on the ground that their liability had been discharged by the bankruptcy court.\nThe State moved to dismiss the complaint, maintaining that the tax liability was not discharged by the plaintiffs\u2019 bankruptcy and that therefore they had failed to state a cause of action. The circuit court granted the State\u2019s motion on September 9, 1988, stating that it agreed that Ellis\u2019 tax liability had not been discharged by the plaintiffs\u2019 bankruptcy. Plaintiffs filed their notice of appeal on October 7, 1988.\nPlaintiffs cite 11 U.S.C. section 523(a)(1)(A) (1988), which provides:\n\u201cA discharge under section 727 *** of this title does not discharge an individual debtor from any debt \u2014 (1) for a tax *** (A) of the kind or for the periods specified in *** section 507(a)(7) of this title ***.\u201d\nThey aver that although the retailers\u2019 occupation tax is either one measured by gross receipts, or is an excise tax, and is therefore not generally dischargeable as one of the kinds of taxes specified in 11 U.S.C. section 507(a)(7) (1988), such taxes are dischargeable if they were due more than three years before the filing of the bankruptcy petition. (11 U.S.C. \u00a7\u00a7507(a)(7)(A)\u00a9, 507(a)(7)(E) (1988).) In other words, plaintiffs rely on the \u201cstaleness\u201d of their tax obligation in seeking to enjoin collection.\nPlaintiffs further assert that Ellis was not required to collect or withhold the retailers\u2019 occupation tax; consequently, the tax was not one specified in section 507(a)(7)(C) as being nondischargeable by bankruptcy regardless of how long the tax was due before the plaintiffs filed for bankruptcy.\nThe State contends that regardless of whether Ellis\u2019 debt to the State was exempted from discharge by section 523(a)(1)(A), it was exempted from discharge by section 523(a)(1)(B).\nSection 523(a)(1)(B)\u00a9 provides:\n\u201cA discharge under section 727 *** of this title *** does not discharge an individual debtor from any debt \u2014 (1) for a tax *** (B) with respect to which a return, if required \u2014 \u00a9 was not filed ***.\u201d (11 U.S.C. \u00a7523(a)(l)(B)(i) (1988).)\nThe State maintains that because Ellis\u2019 debt is for unpaid taxes with respect to which he failed to file returns required by section 3 of the Act (Ill. Rev. Stat. 1989, ch. 120, par. 442), his obligation to the State was not discharged by plaintiffs\u2019 bankruptcy.\nWe agree with the State; consequently, we reject plaintiffs\u2019 claim that the circuit court erred in dismissing their case. 11 U.S.C. section 523(a)(l)(B)(i) makes irrelevant what kind of tax is owed by the debtor or how long before the bankruptcy filing the tax was due.\nIn re Haywood, (Bankr. N.D. Ill. 1986), 62 Bankr. 482, holds that a bankrupt\u2019s failure to file amended State income tax returns due more than three years before the bankruptcy filing renders nondischargeable the tax debt incurred as a result of that failure. There the court stated:\n\u201cAn individual\u2019s debt arising as the result of a tax for which the debtor was required to file a return is nondischargeable if the debtor did not file that return.\u201d 62 Bankr. at 485.\nSee also In re Pruitt (Bankr. D. Wyo. 1989), 107 Bankr. 764 (failure to file Federal income tax returns more than six years before bankruptcy filing made resulting debts nondischargeable).\nPlaintiffs further claim that allowing the State to satisfy its judgments against Ellis by attaching his post-discharge earnings would frustrate the Federal Bankruptcy Act\u2019s policy of giving bankrupt debtors a \u201cfresh start.\u201d However, plaintiffs overlook that 11 U.S.C. section 523(a)(l)(B)(i) makes an exception to this policy in order to further another policy. As noted in In re Haywood (62 Bankr. at 485):\n\u201c \u2018Certain prepetition tax liabilities *** survive as liabilities of the debtor after the case. This category includes (1) taxes for which the debtor had not filed a return as of the bankruptcy petition .... *** [T]he debtor should not be able to use bankruptcy to escape these kinds of taxes. Therefore, these taxes *** survive as continuing debts after the case.\u2019 \u201d (Quoting S. Rep. No. 1106, 95th Cong., 2d Sess. 22 (1978).)\nWe hold that Ellis\u2019 liability to the State for any unpaid taxes owed under the Act with respect to which he didz-not file the required return was not affected by the order of discharge in his bankruptcy proceeding. Therefore, the State asserts a valid affirmative defense to the plaintiffs\u2019 complaint, and the judgment of the circuit court is accordingly affirmed.\nAffirmed.\nDiVITO, P.J., and BILANDIC, J., concur.",
        "type": "majority",
        "author": "JUSTICE SCARIANO"
      }
    ],
    "attorneys": [
      "Morris W. Ellis, of Ellis & Ellis, of Chicago, for appellants.",
      "Neil E Hartigan, Attorney General, of Springfield (Rosalyn B. Kaplan, Assistant Attorney General, of Chicago, of counsel), for appellee."
    ],
    "corrections": "",
    "head_matter": "ELLIS M. ROSENFELD et al., Plaintiffs-Appellants, v. THE DEPARTMENT OF REVENUE, Defendant-Appellee.\nFirst District (2nd Division)\nNo. 1\u201488\u20143033\nOpinion filed October 23, 1990.\nRehearing denied November 26, 1990.\nMorris W. Ellis, of Ellis & Ellis, of Chicago, for appellants.\nNeil E Hartigan, Attorney General, of Springfield (Rosalyn B. Kaplan, Assistant Attorney General, of Chicago, of counsel), for appellee."
  },
  "file_name": "0427-01",
  "first_page_order": 449,
  "last_page_order": 452
}