BOULDEN, Bankruptcy Judge
This memorandum decision supersedes a prior bench ruling that allowed as amendments certain modifications to proofs of claim. Upon review of the transcript of testimony and documents received into evidence, the arguments of the parties and reconsideration of applicable case law, the court instead disallows the modifications as new claims filed after the claims bar date.
FINDINGS OF FACTS
On November 7, 1990, ten related steel production companies (Debtors) filed petitions under chapter 11, primarily in an attempt to reorganize in light of their inability to fund two defined benefit pension plans. The Debtors were eventually successful in confirming a plan of reorganization by order entered February 12, 1993.
The United States of America, Department of the Treasury, Internal Revenue Service (IRS), timely filed proofs of claim (Original Claims) in each of the Debtors' estates on March 14, 1991. Each five page Original Claim contained subcategories itemized for secured and unsecured priority amounts for the tax period 1974 through and including 1989. The Original Claims asserted, among other things, joint and several excise taxes for penalties and interest pursuant to 26 U.S.C. § 4971. The portions of the Original Claims asserting excise taxes were related to the Debtors' inability to meet minimum funding requirements of two qualified pension plans. In addition, the Original Claims itemized a zero income tax liability for the years 1985 through and including 1989.
The IRS began a preliminary review of the Debtors' tax returns prior to the claims bar date. The IRS was concerned regarding the Debtors' future allowances and offsets of net operating losses. Based on its preliminary investigation, the IRS believed the Debtors had large amounts of net operating losses that would eliminate disallowances of deductions, and likely any additional income that may be discovered as part of any audit. However, the IRS believed an issue existed of whether one of the Debtors' pension plans should be disqualified and the deductions for contribution to that plan disallowed as an income tax deduction. The IRS discussed the proofs of claim it intended to file, the pension excise tax liabilities and the pending income tax audit with Debtors' counsel prior to the claims bar date.
Even though the audit of the Debtors' tax returns was in progress, the IRS did not seek an extension of the date to file its proofs of claim. Instead the IRS filed the Original Claims stating that no income taxes were due for the years 1987, 1988, and 1989, but attempted to reserve the right to conduct an audit and amend its Original Claims regarding the 1985-1989 tax period. The IRS knew before the claims bar date that the audit could result in the assessment of an alternative minimum tax against the Debtors, although that was not the primary focus of its inquiry. The language contained in the Original Claims by which the IRS sought to preserve its ability to amend, and upon which it relied to impart notice to all parties, is as follows:
No income tax liability is shown for the tax years 85 through 89 for the consolidated group of corporations of which CF I Steel Corporation was the parent corporation. The returns for those years report net operating losses for all years except 1987. The carryback and/or carryforward of losses from other years to 1987 eliminates the income tax liability shown for 1987. These returns have not been audited but could be audited in the future for the purpose of eliminating any net operating loss carryforward which the debtor might attempt to claim.
As anticipated, the Debtors in fact had large net operating loss carryforwards as of the claims bar date that could be used to reduce taxes in future years. The conditional language contained in the Original Claims put the Debtors, the court, and creditors on notice that the IRS might conduct an audit to eliminate any net operating loss carryforward the Debtors might attempt to claim.
Before the claims bar date, the IRS completed an audit of the Debtors' prior parent, Crane Consolidated Group (Crane). Until that audit was completed and up until weeks immediately preceding the claims bar date, the IRS was unaware that the Debtors had been part of Crane or that the Debtors might have potential tax liability resulting from their relationship to Crane. The Original Claims listed both liability years and overpayment or refund years related to Crane, and asserted a right of offset against the refunds to secure liabilities for the later years.
Subsequent to the filing of the Original Claims, the IRS, Debtors, and Crane entered into various settlement agreements. The purpose of the agreements were to resolve complex disputes concerning a tax allocation agreement between Crane and its subsidiaries for the allocation of tax liability and benefits, to resolve portions of the IRS's Original Claims, as well as a $22 million proof of claim filed against the Debtors by Crane.
One agreement covered the tax period 1984 through 1989 (Second Closing Agreement). The Second Closing Agreement was executed in late June of 1992, and was limited to the allocation of certain tax benefits arising from abandonment of CFI Steel Mill No. 2 claimed by both Crane and the Debtors. The IRS originally disallowed the abandonment deduction. However, as a result of the Second Closing Agreement, the Debtors, filing as a member of Crane, were allowed to deduct $8,396,748 (55%) of the $15,267,000 abandonment deduction claimed in the original consolidated return for 1984. The deficiency arising from the denial of $6,870,252 of the abandonment deduction in 1984 would be paid to the IRS by Crane, and deducted from an amount paid to the Debtors under another portion of the settlement agreement with Crane. The Debtors, filing as CFI, would then be entitled to deduct the remaining $6,870,252 (45%) of the abandonment deduction on an amended return for 1989. This settlement affected the Debtors' income taxes for following years. The Second Closing Agreement also provided that the Debtors would not object to the amendment of the claims of the IRS to reflect any liability arising from the amendment of the 1989 returns, and that the IRS would delete any claim for income taxes for tax years 1984 and 1985.
The IRS proposed adjustments to income including a proposal to deny to Crane a claimed deduction of $15,267,000 taken on Crane's 1984 returns as a result of the claimed abandonment of Mill No. 2. The Debtors also claimed a deduction for the abandonment in the amount of $15,267,000 in its amended 1989 return filed January 29, 1991.
The Debtors' motion for approval of the settlement agreements between the Debtors, Crane and the IRS, included a copy of the Second Closing Agreement as an exhibit and was filed with the court on June 29, 1992. In the motion the Debtors expressed their intent, in spite of the Second Closing Agreement, to object to the IRS claims asserted pursuant to 26 U.S.C. § 4971, and indicated that those IRS claims would be the only remaining claims following the consummation of the various settlement agreements. The IRS objected to certain language in the proposed order approving the various settlement agreements, but withdrew its objections. The settlements were approved by order executed July 13, 1992.
The IRS had originally completed its audit of the Debtors' returns on May 26, 1992, under the assumption that the abandonment losses related to Crane claimed by the Debtors in 1989 would be disallowed. After the Second Closing Agreement was signed, the IRS revised its audit report of the Debtors' returns on July 22, 1992, to take into account the agreed amount of the abandonment loss that was to be allowed on the Debtors' 1989 returns.
On September 28, 1992, three weeks prior to the filing of the Debtors' disclosure statement, eighteen months after the claims bar date and three months after execution of the Second Closing Agreement, the IRS filed what it denominated as amendments to the Original Claims. The documents asserted, among other things, claims against each of the Debtors for income taxes for 1987, 1988 and 1989 (Subsequent Claims). One of the reasons for the delay in filing the Subsequent Claims was a suggestion by counsel for the Debtors that the Debtors may have greater bargaining power with Crane related to the Second Closing Agreement if the IRS deferred filing its Subsequent Claims. The portions of the Subsequent Claims that related to amounts other than for excise taxes totalled $221,073 and were itemized as follows: Kind of Tax Tax Period Date Tax Assessed Tax Due Interest to Petition Date 1120 12-31-87 examination $97,066.00 $22,666.32 liability unassessed 1120 12-31-88 examination $82,290.00 $16,862.43 liability unassessed 1120 12-31-89 examination $71,717.00 $ 5,308.87 liability unassessed
The tax liability asserted for 1987, 1988 and 1989 allegedly arose from an alternative minimum tax. Testimony presented by the IRS revealed that Congress chose to limit the amount of net operating losses that could be used to offset income. The use of the alternative minimum tax, in effect, guarantees some tax liability if there is a set amount of positive income before considering net operating loss carryforwards. The evidence also indicated, generally, that once the taxable income that was shown in the regular income tax computation had been determined, and required adjustments calculated, the result was essentially an alternative minimum income before consideration of net operating loss carryforwards.
The Original Claims stated that Debtors' returns showed losses for 1985, 1986, 1988, and 1989, and that the carryback and/or carryforward of losses from other years eliminated the income tax liability reported for 1987. The Debtors' alternative minimum tax assessment claimed by the IRS arose due to disallowance of deductions, not because of adjustments to net operating loss carryforwards. The reductions or adjustments in operating loss carryover that occurred in the audit of the Debtors' returns did not, by themselves, create an alternative minimum tax.
The deductions that were disallowed related to depreciation, mine reclamation, black lung claims, group insurance, inventory expenses and other adjustments.
At the time the IRS filed its Original Claims, the IRS did not question or dispute the existence of any possible alternative minimum tax liability. The Debtors' return filed for 1987 did not contain Form 4626 that is used to calculate possible alternative minimum tax liability. The Debtors paid an alternative minimum tax for 1988. The Debtors' tax returns filed for 1989 contained Form 4626. The Debtors' original tax returns received into evidence for 1987 (Exhibit C) and 1989 (Exhibit D) that were in the possession of the IRS (and since substituted with copies of only the portion of the returns filed by the Debtors) had been burst apart from the original staples during the IRS auditing process and contained many of the IRS's administrative attachments. The IRS first asserted that the return for 1989 did not contain Form 4626, although exhibit divider number 12 titled "Minimum Tax — Form 4626" was included in Exhibit D that anticipated Form 4626 would follow. Form 4626 was later located in the original Exhibit D by Debtors' counsel during the hearing, but was out of order and did not follow divider number 12. Because of the physical state of the returns, the court places little reliance upon the lack of Form 4626 in the return for 1987, especially since the return also included exhibit divider number 12 titled "Minimum Tax — Form 4626."
The calculation and impact of an alternative minimum tax are complex tax matters. Although an alternative minimum tax is part of the same generic category as an income tax, it is a separate and distinct calculation and tax. The Debtors were public entities and sophisticated taxpayers. They had an in-house tax department, and were subject to a variety of financial reporting requirements. They retained outside accountants with sufficient expertise to understand the complexities of an alternative minimum tax.
Notification that the IRS asserted alternative minimum tax liability was first communicated to Debtors' counsel in April of 1992. The first calculation of the Debtors' alternative minimum tax occurred by document dated May 26, 1992, prior to execution of the Second Closing Agreement. Subsequent to the execution of the Second Closing Agreement, and in consideration thereof, the IRS recalculated the Debtors' alternative minimum tax. As a result, the alternative minimum tax was reduced for 1989 from approximately $217,000 to $71,717. The IRS was aware that the Debtors intended to object to the assertion of excise tax liability but were unaware that, after April of 1992, the Debtors intended to object to the assertion of alternative minimum tax liability. If the IRS had known that the Debtors intended to assert the within objection, the IRS would have made the objection a point in the negotiations for the closing agreements.
The Debtors filed an Objection to and Motion for Disallowance and Determination of Priority of Claim of the Internal Revenue Service (Dated 10/2/92) (Motion), that was joined in by the Official Unsecured Creditors' Committee. The Motion asserted, among other things, that the IRS' alternative minimum tax claims were untimely. An evidentiary hearing addressing that portion of the Motion occurred on February 17, 1994, and the court announced a ruling in open court. The court found that the Internal Revenue Service's Subsequent Claims for 1987, 1988, and 1989 income taxes were allowed as amendments to the Original Claims, and were not newly filed claims. Upon further review of applicable case law, the transcript of the testimony, and the documents received into evidence, the court, sua sponte, determined that it was appropriate to give further consideration to the issues raised at the hearing. The court vacated the bench ruling announced in open court on February 17, 1994, took the matter under advisement by order dated March 8, 1994, and allowed further briefing.
The Motion also sought disallowance of all claims of the IRS for penalties under 26 U.S.C. § 4971. The legal issues raised in the Motion were argued to the court in a claims objection hearing on November 13, 1992. The court ruled on the 26 U.S.C. § 4971 excise tax issues by order dated November 25, 1992, finding that the excise taxes were prepetition penalty claims not entitled to priority or administrative status. The court reserved ruling regarding the timeliness of the 1987, 1988, and 1989 income tax claims pending an evidentiary hearing that would explore the factual basis for the Subsequent Claims.
ISSUES
The Debtors and Official Unsecured Creditors' Committee argue that the conditional language in the Original Claims limits any amendments to elimination of net operating loss carryforwards that the Debtors might attempt to claim. The IRS asserts that the Original Claims put the Debtors, the court, and creditors on notice of what the IRS expected to be the most likely possible results of the audit, but not to limit an amendment to the elimination of any net operating loss forwards the Debtors might attempt to claim. The IRS argues that it was not the IRS' intent to indicate that there were no other audit adjustments possible. It asserts that the IRS was reserving its right to amend its Original Claims to assert any additional taxes that could be claimed from the audit. If the court finds the IRS Subsequent Claims are not an amendment to the Original Claims but, rather, new claims, the IRS asserts excusable neglect as a defense to the Debtors and Official Unsecured Creditors' Committees' objection to the Subsequent Claims.
DISCUSSION
The jurisdiction of this Court is properly invoked under 28 U.S.C. § 157 and 1334 and by Rule 404 of the Rules of Practice of the United States District Court for the District of Utah. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A), (B) and (O) and the court may enter a final order. Venue is proper in the Central Division of the District of Utah.
The issue before this court is whether the 1987, 1988, and 1989 income tax liability asserted in the Subsequent Claims should be allowed as timely filed. The Tenth Circuit is liberal in allowing amendments to timely filed proofs of claim, holding [o]rdinarily, amendment of a proof of claim is freely permitted so long as the claim initially provided adequate notice of the existence, nature, and amount of the claim as well as the creditor's intent to hold the estate liable." Unioil v. Elledge (In re Unioil), 962 F.2d 988, 992 (10th Cir. 1992). However, "[t]he court should not allow truly new claims to proceed under the guise of amendment." Id. at 992; See also United States v. Kolstad (In Re Kolstad), 928 F.2d 171, 175 (5th Cir. 1991), cert. denied, 112 S.Ct. 419 (1991) (amendments do not vitiate the role of bar dates: indeed, courts that authorize amendments must ensure that corrections or adjustments do not set forth wholly new grounds of liability). The admonition that truly new claims cannot proceed under the guise of amendments is the focus of this dispute.
The Debtors and Official Unsecured Creditors Committee also reserve their objection to the substance of the income tax claims. Because the court finds that the Subsequent Claims are untimely filed new proofs of claim, the court need not reach the merits, not yet argued, regarding allowance or disallowance of the Subsequent Claims.
In determining whether an amendment should be allowed, Unioil set out a two-step test. The first component is a threshold issue of whether the original proof of claim is amendable at all. Only after the decision that the proof of claim may be amended does the court proceed to the second step of determining if the amendment should be allowed. Unioil, 962 F.2d at 992. If the amendment is not a disguised new proof of claim and is subject to allowance on equitable grounds, the court in Unioil cites its previous decision, Fidelity Deposit Co. v. Fitzgerald (In re Midyett May Constr. Co.), 272 F.2d 121 (10th Cir. 1959), cert. denied, 80 S.Ct. 669 (1960) for the proposition that "courts should liberally allow amendment of a proof of claim where anything in the record justifies such action." Unioil, 962 F.2d at 993.
Unioil found that actual prejudice to the parties is a key factor in determining if an amendment to a timely filed claim should be allowed. Unioil, 962 F.2d at 993, citing Sambo's Restaurants, Inc. v. Wheeler (In re Sambo's Restaurants, Inc.), 754 F.2d 811, 816-17 (9th Cir. 1985) (where party opposing amendment of proof of claim fails to demonstrate actual prejudice resulting therefrom, amendment should be freely allowed).
Rather than the two step test set forth in Unioil, the IRS relies on the Eleventh Circuit's analysis in United States v. International Horizons, Inc. (In re International Horizons, Inc.), 751 F.2d 1213 (11th Cir. 1985). In its discussion, the Eleventh Circuit appears to have reviewed the arguments proposed by the parties on three grounds. First, the court considered whether or not the claim was amendable or was an untimely filed new claim. Second, the court considered whether a prior or timely informal claim had been filed that would excuse the tardy attempt to amend the original claim. Finally, the court rejected the argument that equitable factors justified the late filed amendment. To the extent the International Horizons case is deemed to set forth a three part test that includes equitable allowance of an untimely filed new claim, it is not the same test articulated by the Tenth Circuit in Unioil. While the Tenth Circuit in Unioil requires an affirmative finding that the original claim is amendable before equitable considerations may be applied, the Eleventh Circuit imposes no such restriction.
Thus, the threshold question is whether the Original Claims are amendable. If so, and if the claim would otherwise be allowable on the merits, the court may still determine that it would be prejudicial to allow the Subsequent Claims and the court may deny the amendments. See LeaseAmerica Corp. v. Eckel, 710 F.2d 1470 (10th Cir. 1983).
The IRS' Original Claims Lacked Sufficient Notice to Allow the Subsequent Claims as Amendments
To pass the threshold test set forth in Unioil, the Original Claims must have given notice of the existence, nature, and amount of the claims and of the creditor's intent to hold the estate liable, for the Subsequent Claims to be considered as amendments and eventually allowed on the merits. Unioil, 962 F.2d at 992; Walsh v. Lockhart Assocs., 339 F.2d 417 (5th Cir. 1964), cert. denied, 85 S.Ct. 1085 (1965). Unioil appears to require that each element be proved in order for adequate notice to have been given and the claim to be considered. Close scrutiny must be employed to ensure that the amendments are genuine and not disguised new claims. In re Am Int'l., Inc., 67 B.R. 79, 81 (N.D.Ill. 1986) (citing In re V.M. Corp., 23 B.R. 952, 954 (Bankr.W.D.Mich. 1982)). See also Unioil, 962 F.2d at 992; International Horizons, 751 F.2d at 1216. Applying the Unioil factors leads to a conclusion that, on a variety of theories, the Subsequent Claims are new claims.
Existence. The IRS' Original Claims put the Debtors, the court, and creditors on notice that an audit may be conducted "for the purpose of eliminating any net operating loss carryforward which the debtor might attempt to claim." Although liability for alternative minimum taxes may have existed at the time of filing the Original Claims, the Original Claims give no indication of that existence. Even the IRS had not considered the possibility of an alternative minimum tax and believed that there were sufficient net loss carryforward to prevent the IRS from claiming any additional tax for the years 1987, 1988, and 1989. Indeed, an adjustment of the Debtors' available net operating loss carryover would not produce an alternative minimum tax. The language in the Original Claims is clear on its face and limits amendments to the "eliminat[ion] [of] any net operating loss carryforward which the debtor might attempt to claim." The Original Claims did not put any entity on notice of the existence of alternative minimum tax liability for the tax years 1987, 1988, or 1989.
Nature. The Subsequent Claims are for an alternative minimum tax that is a type of tax governed by a specific provision of the Internal Revenue Code. An alternative minimum tax claim does not arise by "eliminating any net operating loss carryforward which the Debtors might attempt to claim." Rather, the claimed alternative minimum tax liability arose because of the disallowance of deductions. At the time of filing the Original Claims, the IRS was unaware of any claim in the nature of an alternative minimum tax.
The IRS's argument that the nature of the Subsequent Claims were disclosed because the alternative minimum tax relates to income tax, and the Original Claims also referenced income tax, is unavailing. Other courts have denied as untimely claims for a type of tax different from the type claimed in a timely proof of claim. The Eleventh Circuit upheld a decision by the United States Bankruptcy Court for the Northern District of Georgia finding that "nonrecognition of a transaction and adjustments premised upon the complex DISC tax provisions, simply did not relate to basic withholding and FUTA taxes." International Horizons, 751 F.2d at 1217.
Here, the Debtors are sophisticated taxpayers and understand the complexities of an alternative minimum tax. The calculation and impact of an alternative minimum tax are complex tax matters such as those set forth in International Horizons. Although an alternative minimum tax is in the same generic category as "income tax," it requires a separate and distinct calculation. The protective language in the Original Claims is insufficient to put the Debtors, the court, creditors, and even the IRS on notice that an alternative minimum tax may have been owing.
Amount. The amount listed in the Original Claims for income tax liability for 1987, 1988 and 1989 was zero. A strict application of the test related to amount would immediately preclude the Subsequent Claims from allowance, because a claim that the Debtors were not liable for any amount could not impart notice of the subsequently claimed $221,073 liability. Other courts have found that the amount is but a factor. See, e.g., Kolstad, 928 F.2d at 175. However, "to be within the scope of a permissible amendment, the second claim should not only be of the same nature as the first but also reasonably within the amount to which the first claim provided notice." Am Int'l, 67 B.R. at 82 (citingInternational Horizons, 751 F.2d at 1217-18). See also Integrated Resources, Inc. v. Ameritrust Co. Nat'l Assoc. (In re Integrated Resources, Inc.), 157 B.R. 66, 70 (S.D.N.Y. 1993). Because the income tax liability for 1987, 1988, and 1989 was listed as "zero" on the IRS' Original Claims, it is illogical to find that the amount of the Original Claims alone would be sufficient to place the Debtors on notice that the Original Claims may be amended to include claims of over $200,000.
Intent to hold the estate liable.
Since the Original Claims indicated no amount owing and did not reference liability for an alternative minimum tax, it is difficult to conclude that the Original Claims placed parties on notice of an intent to hold the estate liable for the subsequently claimed taxes. The interpretation of the IRS that its subjective intent that the protective language encompassed any and all liability that may result from the audit is insufficient to place others on notice that the estate may be liable for the alternative minimum taxes. Indeed, it appears that the IRS did not even consider the possibility of the estate being liable for an alternative minimum tax at the time the Original Claims were filed. How then can the protective language place others on notice that the IRS had a more expansive intent than that reflected in the Original Claims.
The argument could be made, in reliance upon the test set forth inInternational Horizons, that the Second Closing Agreement may be an informal proof of claim. However, the Second Closing Agreement fails to meet the five-prong test referred to in Reliance Equities, Inc. v. Valley Fed. Sav. Loan Ass'n. (In re Reliance Equities, Inc.), 966 F.2d 1338, 1345 (10th Cir. 1992). For the Second Closing Agreement to constitute an informal proof of claim upon which the IRS could base an amendment, it would have had to have been filed with the court before the claims bar date. Instead, it was filed as an attachment to the motion to approve the various settlements over a year after the claims bar date. Even if the Debtors had been aware of the IRS's position that an alternative minimum tax was due, "mere knowledge of the existence of the claim . . . is insufficient." Wilkens v. Simon Bros., Inc., 731 F.2d 462, 465 (7th Cir. 1984). For the reasons set forth above regarding the intent to hold the estate liable, and the lack of demand on the estate for a claimed alternative minimum tax, the Second Closing Agreement is insufficient to constitute an informal proof of claim for alternative minimum taxes.
The Tenth Circuit in Reliance Equities, 966 F.2d at 1345, set forth the follow five part test to determine if an informal claim exists:
1. the proof of claim must be in writing;
2. the writing must contain a demand by the creditor on the debtor's estate;
3. the writing must express an intent to hold the debtor liable for the debt;
4. the proof of claim must be filed with the Bankruptcy Court;
5. based on the facts of the case, it would be equitable to allow the amendment.
The IRS' Subsequent Claims Are Not Allowable On The Basis of Equitable Arguments
Bankruptcy Rule 9006(b)(1) provides that the court may, in its discretion, allow untimely acts if the failure to act was due to excusable neglect. The Supreme Court stated that if appropriate, the courts should "accept late filings caused by inadvertence, mistake, or carelessness, as well as by intervening circumstances beyond the party's control." Pioneer Inv. Servs. v. Brunswick Assocs., 113 S.Ct. 1489, 1495 (1992). The determination of what is excusable "is at bottom an equitable one, taking account of all relevant circumstances surrounding the party's omission . . . [including] the danger of prejudice to the debtor, the length of the delay, and its potential impact on judicial proceedings, the reason for the delay, including whether it was within the reasonable control of the movant, and whether the movant acted in good faith."Pioneer Inv. Servs., 113 S.Ct. at 1498.
The IRS asserts that it relied to its detriment upon conversations it had with Debtors' counsel respecting amendment of the Original Claims; however, the IRS admitted that the conversations that related to an alternative minimum tax took place after the claims bar date. Conversations prior to the claims bar date related to excise tax liability. The IRS's complaint in fact relates to its assertion that had it known the Debtors would object to the claimed alternative minimum tax, the IRS may have negotiated the Second Closing Agreement differently. That complaint does not form the basis of claimed excusable neglect in filing the Original Claims.
The IRS also argues that it relied to its detriment upon the Debtors' failure to submit an alternative minimum tax Form 4626 for the years 1987, 1988 and 1989. The evidence shows that Form 4626 was submitted for the year 1989, and no testimony was offered to demonstrate any reliance on the absence of Form 4626 for 1988. Further, the evidence regarding reliance on the lack of Form 4626 for 1987 is not compelling. This court concludes that there is no credible evidence that gives support for finding that the untimely filing was due to the IRS's excusable neglect.
The IRS's alternative equitable argument applying the factors set forth in International Horizons to this new claim is not well taken. Indeed, the motion to approve the various settlements related to Crane indicated to all parties, including the IRS that the Debtors' would continue to object to the claims related to excise taxes, and that the Debtors believed those to be the only remaining tax claims for which the Debtors may be liable. That should have placed the IRS on notice that the Debtors were unaware the IRS may claim an alternative minimum tax liability. After weighing the evidence and considering all of the circumstances, the court finds that there is no equitable basis for allowance of the Subsequent Claims in light of other remedies available to the IRS.
Although the parties did not raise the issue, some courts have found that untimeliness of filing a proof of claim does not in itself require disallowance but only subordination. In re Babbin, 164 B.R. 157 (Bankr.D.Colo. 1994); In re Rago, 149 B.R. 882 (Bankr.N.D.Ill. 1992). But see In re Gullatt, 164 B.R. 279 (Bankr.M.D.Tenn. 1994), rev'd, 1994 WL 371077 (M.D.Tenn. 1994) (holding that in Chapter 13 cases Rule 3002 requires courts to disallow late filed claims). Even were this court to rule that an untimely filed claim is not disallowed but subordinated, it would make little difference in these confirmed chapter 11 cases where there is scant distribution to unsecured creditors, with nothing to subordinated classes.
Bankruptcy Rule 3003(c)(3) allows the court to grant an extension of time to file a proof of claim for cause shown. Bankruptcy Rule 3002(c)(1) provides a specific exception in chapter 7, 12 or 13 cases for the United States. Such a motion would require notice to parties in interest by the IRS and presentation of proof to support a finding of cause. It would also probably result in a fixed time limit to file claims, rather than the filing of amendments at the IRS's leisure.
CONCLUSION
Application of the notice requirements of the Unioil test indicates the Subsequent Claims were new claims, not amendments of prior timely filed claims. No suitable argument saves the untimely filing of the Subsequent Claims. The Debtor's objection to the IRS' claims for alternative minimum taxes for the years 1987, 1988 and 1989 are well taken.
Therefore, based on the foregoing, it is hereby:
ORDERED, that the IRS' Subsequent Claims for 1987, 1988, and 1989 alternative minimum taxes, filed in September of 1992, are untimely filed new claims, and it is further
ORDERED, that the Subsequent Claims asserted jointly and severally in the amount of $221,073 are hereby disallowed.