United States v. Reynolds

MEMORANDUM OPINION

MICHAEL, District Judge.

The Internal Revenue Service (“IRS”) retains in a so-called “suspense account” the amount of $1,681.96, a portion of the Reynolds’ (“Taxpayers”) tax overpayment for the 1980 tax year. The government has offset this amount against the Reynolds’ 1979 unpaid tax liability. The issue on appeal is whether the bankruptcy court below erred by ordering a turnover to the Taxpayers of the funds in the IRS “suspense account” and thus failing to lift the automatic stay to permit the setoff. While this appeal was pending, the Chapter 13 trustee for the…