W. Richard Morgan, and Janice J. Morgan v. Commissioner of Internal Revenue

LAY, Circuit Judge.

I. BACKGROUND

This case arises out of tax assessments made against W. Richard Morgan and Janice J. Morgan (collectively “Morgan”) for federal income tax deficiencies for the years 1981, 1982, and 1988 resulting from investments in a tax shelter later invalidated by the Internal Revenue Service. As a result of these deficiencies, Morgan filed for bankruptcy. On December 22, 1994, the bankruptcy court issued an order in which it refused to discharge Morgan’s tax liabilities for 1981 and 1982, but granted a discharge as to Morgan’s 1983 tax liability. The bankruptcy court also…