The opinion filed July 12, 2011 is withdrawn and replaced with the accompanying opinion. See the July 12, 2011 opinion here.
Because Jones’s tax debt arose more than three years before she filed her Chapter 7 bankruptcy petition, it would be discharged unless the lookback period was suspended by statute. The lookback period is suspended by an unnumbered paragraph in Bankruptcy Code Section 507(a)(8) (“the suspension provision”) when, as relevant here, an automatic stay precludes the creditor from collecting on the debt. The only automatic stay provisions potentially at issue in this appeal are those that preclude creditors from pursuing collection actions against the property of a bankruptcy estate. See 11 U.S.C. §§ 362(a)(3), 362(a)(4). The Franchise Tax Board (“FTB”) argues that, as a consequence of Jones’s prior Chapter 13 bankruptcy case, the lookback period was suspended and the tax debt not discharged.
When the bankruptcy court confirmed the Joneses’ Chapter 13 plan, the estate property revested in Jones and became Jones’s property, thus lifting the applicable stay provisions. Since this revesting occurred before the tax debt came due, no stay precluded the FTB from collecting on the debt under § 362. Consequently, the tax debt was not excepted from the Chapter 7 discharge, and the principles of equitable tolling do not apply to extend the lookback period as the FTB was neither precluded from collecting on the tax debt nor did it actively try to protect its claim.
The Court held that the debt was discharged.