Ezel / IRS Rulings / 201315022

CCA 201315022: Interpreting the two-year Chapter 13 discharge rule

Number
201315022
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
(Effective October 1, 1979) Bankruptcy Code (See Also 9104.00-00)
Topics
Other topics
Code sections
§ 1328, § 6110
Ruling dated
March 7, 2013
Publicly released
April 12, 2013
Source
View Official PDF

Apply this to your situation

This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2013, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2013
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It is advice from the IRS Office of Chief Counsel to IRS personnel on the facts they presented, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)

Plain-English summary

Chief Counsel advice interprets the phrase “such order” in Bankruptcy Code section 1328(f)(2). The memo reads that phrase as referring to the order for relief under the bankruptcy chapter, because that is the most recent use of “order” in the provision. On that reading, a debtor is not entitled to a Chapter 13 discharge if the debtor received a Chapter 13 discharge during the two-year period before the order for relief in the current Chapter 13 case. The advice notes that a reading tied to the current case's discharge order would make little sense because the debtor might not receive a discharge in that case.

Ruling snapshot

  • Question: What does “such order” refer to in Bankruptcy Code section 1328(f)(2)?
  • Outcome: Advice given, it refers to the order for relief in the present case.
  • Key authorities: Bankruptcy Code § 1328(f)(1) and (2).

Full text (IRS public release)

ID: CCA_2013030710253114 Number: 201315022
Release Date: 4/12/2013
Office: --------------
UILC: 9115.00-00

From: -----------------
Sent: Thursday, March 07, 2013 10:25:32 AM
To: ---------------
Cc:
Subject: RE: Interpretation of BC sec 1328(f)(2)

I agree with the trustee on this one. When 1328(f)(2) refers to “such order” I think it has to be referring to the last time the term “order” was used, which was in (f)(1). I think “such order” was used so that “order for relief under this chapter” wouldn’t have to be repeated. Section (f) does not use the term “order” so I don’t think (f)(2) would be interpreted as referring to the prior discharge order.

So, I think the debtor isn’t entitled to a chapter 13 discharge if he received a chapter 13 discharge during the 2 year period preceding the order for relief in the present chapter 13 case. In fact, a rule referring to the discharge order in the present case wouldn’t make a lot of sense, considering that the debtor may not be getting a discharge in the present case, and that debtors rarely get a discharge in a prior chapter 13 within 2 years of the present proposed discharge, because the present chapter 13 plan would usually be 3-5 years long.

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