Lilly v. United States (In re Lilly)

MEMORANDUM OF DECISION

ALFRED C. HAGAN, Bankruptcy Judge.

In this adversary proceeding, the parties, Edlee Taft Lilly and Louella Lee Lilly (the “Debtors”), and the Internal Revenue Service of the United States (the “Service”) have filed cross-motions for summary judgment.

FACTUAL BACKGROUND

The Service conducted an audit of the Debtors’ income tax return for 1981. The Debtors appealed the Service’s audit determination to the Service’s Office of Appeals. The Debtors were represented in the appeal by Michael Emert. Mr. Lilly participated in the audit process in person. Mrs. Lilly did not attend…