United States v. Frontone

POSNER, Circuit Judge.

The question presented by this appeal is whether a claim by the Internal Revenue Service to recover an erroneous refund is dischargeable in bankruptcy even if as a consequence of the refund the debt- or underpaid his taxes. The bankruptcy court, seconded by the district court, said yes, it is dischargeable, and the IRS appeals.

When it reviewed the Frontones’ 2000 tax return, the IRS determined that they had overpaid the taxes they owed by more than five thousand dollars, and it mailed them a refund. Within a couple of months the IRS discovered its mistake and made a…