In re: WILBUR G. WESTBERRY v. Wilbur G. Westberry

*The Honorable Robert Holmes Bell, United States District Judge for
the Western District of Michigan, sitting by designation.
1
RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 2000 FED App. 0189P (6th Cir.)
File Name: 00a0189p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
In re: W ILBUR G.
W ESTBERRY ,
Debtor.
________________________
INTERNAL R EVENUE S ERVICE ,
Appellee,
v.
W ILBUR G. W ESTBERRY ,
Appellant.
;>

1
No. 98-6779
Appeal from the United States District Court
for the Middle District of Tennessee at Nashville.
No. 98-00438—Todd J. Campbell, District Judge.
Argued: February 1, 2000
Decided and Filed: June 6, 2000
Before: COLE and CLAY, Circuit Judges; BELL, District
Judge.*

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2 In re Westberry No. 98-6779
_________________
COUNSEL
ARGUED: Mark H. Westlake, WESTLAKE & MARSDEN,
Nashville, Tennessee, for Appellant. A. Wray Muoio, TAX
DIVISION, DEPARTMENT OF JUSTICE, Washington,
D.C., for Appellee. ON BRIEF: Mark H. Westlake,
WESTLAKE & MARSDEN, Nashville, Tennessee, for
Appellant. A. Wray Muoio, TAX DIVISION,
DEPARTMENT OF JUSTICE, Washington, D.C., David
English Carmack, U.S. DEPARTMENT OF JUSTICE,
APPELLATE SECTION TAX DIVISION, Washington, D.C.,
for Appellee.
_________________
OPINION
_________________
R. GUY COLE, JR., Circuit Judge. The sole issue
presented in this appeal is whether federal income and self-
employment taxes should be considered consumer debt for
purposes of 11 U.S.C. § 1301, the codebtor stay set forth in
the Bankruptcy Code. For the reasons that follow, we hold
that these taxes are not consumer debt and, therefore,
AFFIRM the judgment of the district court.
I.
The facts are stipulated by the parties. The following
version is taken from the decision of the bankruptcy court:
Wilbur G. Westberry filed Chapter 13 on November 5,
1997. The debtor and his nonfiling spouse jointly owed
federal taxes for 1988 of $34,525.02. The debtor’s plan
proposed to pay the taxes in full in three years. The IRS
began collection against the nonfiling codebtor by
serving a notice of levy on her employer. The debtor
filed a motion to enforce the codebtor stay. The IRS
objected.

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10 In re Westberry No. 98-6779
6Because we have determined that income taxes are not consumer
debt under the § 1301 codebtor stay, we need not reach the issue of
whether the Anti-Injunction Act, 26 U.S.C. § 7421(a), prevents
enforcement of the codebtor stay on income taxes. See In re Pressimore,
39 B.R. at 244.
same way), we do not believe our interpretation of the
Bankruptcy Code need be constrained by the interpretation of
an entirely different statute with a different purpose and
history. See, e.g., United States v. Meade, 175 F.3d 215, 221
(1st Cir. 1999) (stating that “precedent teaches that the case
for construing one statute in a manner similar to another is
weakest when the two have significant differences and, here,
the appellant seeks to compare plums with pomegranates”)
(internal citation omitted).6
III.
For the forgoing reasons, we AFFIRM the district court’s
determination that income taxes should not be considered
consumer debt for purposes of the § 1301 codebtor stay.
No. 98-6779 In re Westberry 3
The tax debt relates only to income earned in 1988. In
that year, the debtor was a self-employed insurance
salesman. He incurred federal income and
self-employment taxes on his earnings. All income
earned in 1988 was used by the debtor and his wife for
personal, family, or household purposes -- to support
themselves and their three dependents. No business
assets were acquired in 1988, except perhaps a
typewriter, and no money was spent on businesses,
investments, or other profit-making activities.
In re Westberry, 219 B.R. 976, 977 (Bankr. M.D. Tenn.
1998).
The bankruptcy court concluded that income taxes could be
consumer debt for purposes of the codebtor stay and that, in
this case, because the taxes were incurred “for a personal,
family, or household purpose,” the codebtor stay applied. See
Westberry, 219 B.R. at 978-79. The IRS appealed.
The district court reversed the bankruptcy court, holding
that the tax liability at issue was not consumer debt because
it was not incurred, but “involuntarily imposed by the
government for a public purpose” and resulted “from earning
money rather than consumption.” IRS v. Westberry (In re
Westberry), No. 3:98-0438 (M.D. Tenn. Nov. 4, 1998).
Westberry now appeals the district court’s decision.
II.
The issue presented here, whether federal income taxes
should be considered consumer debt for purposes of 11
U.S.C. § 1301, is a question of law, which we review de
novo. See Investors Credit Corp. v. Batie (In re Batie), 995
F.2d 85, 88 (6th Cir. 1993).
The codebtor stay provides that “a creditor may not act . . .
to collect all or any part of a consumer debt of the debtor from
any individual that is liable on such debt with the debtor.” 11
U.S.C. § 1301. Consumer debt is defined in the Bankruptcy
Code as “debt incurred by an individual primarily for a

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4 In re Westberry No. 98-6779
1At the time of trial, the debtor and his wife had separated and
maintained separate households.
personal, family, or household purpose.” 11 U.S.C. § 101(8).
Westberry argues that the stay should apply to prevent the IRS
from attempting to collect from his wife,1 the codebtor on the
1988 taxes because, as stipulated, the money that should have
been paid in taxes was used for family and household
purposes.
This is an issue of first impression for our circuit as well as
the federal courts of appeals in general. Almost without
exception, the bankruptcy courts that have addressed this
question have determined that tax debt should not be
considered consumer debt for purposes of the codebtor stay.
See, e.g., In re Stovall, 209 B.R. 849, 854 (Bankr. E.D. Va.
1997); In re Dye, 190 B.R. 566, 567 (Bankr. N.D. Ill. 1995);
In re Marshalek, 158 B.R. 704, 706 (Bankr. N.D. Ohio 1993);
In re Greene, 157 B.R. 496, 497 (Bankr. S.D. Ga. 1993);
Goldsby v. United States (In re Goldsby), 135 B.R. 611, 613-
15 (Bankr. E.D. Ark. 1992); In re Reiter, 126 B.R. 961
(Bankr. W.D. Texas 1991); Harrison v. Internal Revenue
Service (In re Harrison), 82 B.R. 557, 558 (Bankr. D. Colo.
1987); Pressimone v. Internal Revenue Service (In re
Pressimone), 39 B.R. 240, 244 (N.D.N.Y. 1984). We find the
weight of these opinions and their reasoning persuasive.
First, a tax debt is “incurred” differently from a consumer
debt. Although it is true that tax debts may be incurred under
the Bankruptcy Code, this incurrence is not voluntary on the
part of the taxpayer. See Reiter, 126 B.R. at 964; see also
Marshalek, 158 B.R. at 706 (stating that “volition is essential”
to a classification as consumer debt in finding that a vehicular
accident judgment was not consumer debt under Chapter 7).
We may at least hope to choose to incur consumer debt; its
certainty being nothing like death and taxes. See Letter from
Benjamin Franklin to Jean-Baptiste Le Roy (Nov. 13, 1789).
No. 98-6779 In re Westberry 9
5Westberry does not argue that these statutes are in conflict, which
would, of course, require us to interpret the statutes so as to give effect to
each law.
the consumer protection statutes upon which the Bankruptcy
Code’s definition of consumer debt was derived. See id. at
1054-55. The profit motive analysis is used, and is clearly
appropriate, to determine whether a debt falls outside the
category of consumer debt. There is nothing inherent in this
test, or direction from the Bankruptcy Code to suggest, that
the test defines the only category of non-consumer debt.
Therefore, while the profit motive analysis may assist in the
determination of which debts are not consumer debt, it does
not prohibit other debts from falling outside of the category of
consumer debt. See Marshalek, 158 B.R. at 706 (“The profit
motive test is normally applied to cases involving
expenditures. . . . An inability to classify a particular debt as
a business debt does not automatically relegate it to the status
of consumer debt.”). But see Kestell v. Kestell (In re Kestell),
99 F.3d 146, 149 (4th Cir. 1996) (using the test to determine
that because debt was not business debt, it was consumer
debt).
Westberry also argues that income tax debt has been
deemed personal debt for purposes of the Tax Code and,
therefore, the same classification should hold under the
Bankruptcy Code.5 For example, he cites the IRS regulation
that classifies interest on income tax debt as personal interest,
which cannot be deducted, to support his argument. See 26
C.F.R. § 1.163.9T(b)(2)(i)(A). Absent any indication from
Congress, see, e.g., Trans World Airlines, Inc. v. Thurston,
469 U.S. 111, 126 (1985) (using prior interpretations of an
Fair Labor Standards Act provision to interpret language in
the Age Discrimination in Employment Act because Congress
showed detailed knowledge of the FLSA when enacting the
ADEA) or obvious similarity of language or purpose between
these statutory provisions, see, e.g., Northcross v. Board of
Educ. of the Memphis City Schs., 412 U.S. 427, 428 (1973)
(noting that a similarity of language and a “common raison
d’etre” indicate that two statutes should be interpreted in the

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8 In re Westberry No. 98-6779
are primarily for personal, family, or household purposes”); 15 U.S.C.
§ 1602(h) (defining, under the Truth in Lending Act, a “consumer loan”
as “[a transaction] in which the party to whom credit is offered or
extended is a natural person, and the money, property, or services which
are the subject of the transaction are primarily for personal, family, or
household purposes”).
4We note that at least two sister circuits have suggested that taxes
should not be considered “debt” under the Fair Debt Collection Practices
Act. For example, Beggs v. Rossi, 145 F.3d 511, 512 (2d Cir. 1998),
states:
The [Fair Debt Collection Practices Act] defines a “debt” as
“any obligation or alleged obligation of a consumer to pay
money arising out of a transaction in which the money, property,
insurance, or services which are the subject of the transaction are
primarily for personal, family, or household purposes, whether
or not such obligation has been reduced to judgment.” 15 U.S.C.
§ 1692a(5). In determining that the personal property taxes at
issue in this case are not “debts” within the meaning of the
FDCPA, the district court relied principally upon the decision of
the Court of Appeals for the Third Circuit in Staub v. Harris,
626 F.2d 275 (3d Cir. 1980). In Staub, the Third Circuit held
that “at a minimum, the statute contemplates that the debt has
arisen as a result of the rendition of a service or purchase of
property or other item of value. The relationship between
taxpayer and taxing authority does not encompass that type of
pro tanto exchange which the statutory definition envisages.” Id.
at 278. We agree with the district court that Staub is persuasive
authority and is dispositive in this case.
that cases under these similarly worded statutes guide our
analysis of this issue.4 Congress did not indicate, through the
legislative history of § 1301, whether it intended to include
taxes under the codebtor stay.
This distinctive treatment of taxes under the Bankruptcy
Code, as well as the distinctions between tax debt and
consumer debt, indicate that the profit motive test, which was
used by the bankruptcy court in this case, is not determinative
of this issue. The profit motive test determines that debt is
not consumer debt if the debt was “incurred with an eye
toward profit.” In re Booth, 858 F.2d 1051, 1055 (5th Cir.
1988). This test was derived from a similar test used under
No. 98-6779 In re Westberry 5
Second, consumer debt is incurred for personal or
household purposes, as stated in the statute, while taxes are
incurred for a public purpose. See Stovall, 209 B.R. at 854
(stating that taxes are “imposed by a government for the
public welfare” in the course of finding that unpaid personal
property tax on the debtor’s car was not consumer debt for
purposes of the codebtor stay). The Supreme Court has long
noted, in other contexts, the public purpose of the imposition
of taxes. See, e.g., Loan Assoc. v. Topeka, 87 U.S. 655, 664
(1874) (“We have established . . . beyond cavil that there can
be no lawful tax which is not laid for a public purpose.”).
Third, taxes arise from the earning of money, while
consumer debt results from its consumption. See Greene, 157
B.R. at 497; Harrison, 82 B.R. at 558; Pressimone, 39 B.R.
at 244. Different events give rise to tax debt than to consumer
debt – Westberry’s obligation to the IRS arose from the
earning of income, not from his expenditure on personal and
family items.
Finally, unlike taxes, consumer debt normally involves the
extension of credit.
The sum of these material differences leads us to conclude
that Westberry’s tax debts cannot be considered consumer
debt for purposes of the § 1301 codebtor stay.
Westberry contends that In re Whitelock, 122 B.R. 582
(Bankr. D. Utah 1990) counsels us to decide otherwise. We
disagree. In Whitelock, the debtor took out a loan from First
Security Financial (FSF), secured by his mother’s single
family home, to pay an IRS liability. See id. at 584. The
debtor then took out a second note to pay off the first note;
this second note was secured by a deed of trust on the same
residence. See id. at 585-86. The debtor filed for bankruptcy
under Chapter 13 approximately three months later. See id.
The bankruptcy court found that these obligations secured by
real property may be considered consumer debt, despite some
language in the legislative history of § 101(7) – the precursor
to § 101(8) -- which states that consumer debt does not
include debt secured by real property. See id. at 587 (quoting

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6 In re Westberry No. 98-6779
2This court has not interpreted the “consumer debt” language of the
Bankruptcy Code, even in other contexts within the Code. See Cohen v.
De la Cruz, 523 U.S. 213, 220 (1998) (noting the “presumption that
equivalent words have equivalent meaning when repeated in the same
statute”). Our sister circuits have examined the “consumer debt”
language, as applied to other sections of the Code, but not with respect to
tax debts. See Stewart v. United State Trustee (In re Stewart), 175 F.3d
796 (10th Cir. 1999) (finding that a Chapter 7 debtor’s funds were put to
household living expenses and, therefore, were consumer debts); Kestell
v. Kestell (In re Kestell), 99 F.3d 146 (4th Cir. 1996) (determining, under
a profit motive test, that money owed to the debtor’s former wife from a
divorce judgment was consumer debt for purposes of § 707); Burns v.
Citizens Nat’l Bank (In re Burns), 894 F.2d 361 (10th Cir. 1990) (finding
that loans taken out to play the stock market were not consumer debt, for
purposes of determining whether attorney fees should be provided under
11 U.S.C. § 523(d)); Zolg v. Kelly (In re Kelly), 841 F.2d 908, 913 (9th
Cir. 1988) (finding, in a § 707(b) case, that attorney fees were consumer
debt because the suit was begun “for the purpose of recovering money
allegedly overpaid in purchasing their home”); In re Booth, 858 F.2d 1051
(5th Cir. 1988). These cases do not change or detract from our analysis.
124 Cong. Rec. H11,090 (daily ed. Sept. 28, 1978) (statement
of Rep. Edwards); 124 Cong. Rec. S17,406 (daily ed. Oct. 6,
1978) (statement of Sen. DeConcini)). The court looked to
the purpose of the debt, concluding that the second loan,
which was used to pay off the first loan that payed the IRS
debt, served “a family or household purpose.” Id. at 587. The
court assumed that the debt was either consumer or business
and, because there was “no substantial indication that the
repayment of the FSF debt was in any manner business
related,” it was, therefore, consumer debt. Id. Whitelock is
distinguishable from the present case because the debt was
only indirectly incurred to cover the IRS liability, not directly
incurred as in this case. Further, Whitelock, in dictum,
approvingly quotes two cases which find that tax debt is not
consumer debt. See Whitelock, 122 B.R. at 587 n.8 (citing
Harrison, 82 B.R. at 558; Pressimone, 39 B.R. at 245).
In order to determine the meaning of consumer debt, we
also examine the “language and design of the statute as a
whole.” Schroyer v. Frankel, 197 F.3d 1170, 1174 (6th Cir.
1999).2 Throughout the Bankruptcy Code, Congress has
No. 98-6779 In re Westberry 7
3See 15 U.S.C. § 1692(a) (defining “debt,” under the Fair Debt
Collection Practices Act, as “any obligation or alleged obligation of a
consumer to pay money arising out of a transaction in which the money,
property, insurance, or services which are the subject of the transaction
clearly treated tax debt differently from other debts, including
consumer debt. For example, certain tax debts are not
dischargeable in bankruptcy, based partially on an assessment
of the importance of the collection of tax revenue. See 11
U.S.C. § 523(a)(1) (nondischargeability of certain tax debts);
see also 146 Cong. Rec. S167-05 at *S178 (daily ed. Feb. 1,
2000) (statement of Sen. Levin) (quoting National Bankruptcy
Review Commission Final Report, Chapter 1: Consumer
Bankruptcy (1997)) (“Other debts are excepted from
discharge because of the inherent nature of the obligation,
without regard to any culpability of the debtor. Regardless of
the debtor’s good faith, for example, . . . many tax claims
remain nondischargeable. Society’s interest in excepting
those debts from discharge outweigh the debtor’s need for a
fresh economic start.”); Bruning v. United States, 376 U.S.
358, 361 (1964) (noting, in the context of an application of a
provision of the prior Bankruptcy Code relating to tax debt,
that the provision “demonstrates congressional judgment that
certain problems -- e.g., those of financing government --
override the value of giving the debtor a wholly fresh start.”).
In addition, tax debts are given a privileged status relative to
certain other debts. See, e.g., 11 U.S.C. § 507(a)(8).
We note that although we have analyzed whether taxes are
consumer debt based on the plain language and meaning of
the statute, see Zolg v. Kelly (In re Kelly), 841 F.2d 908, 912
(9th Cir. 1988) (stating that consumer debt capable of plain
meaning interpretation); Reiter, 126 B.R. 961, 964 (finding no
need to resort to legislative history to determine if taxes were
consumer debt under § 1301), even if we were to find the
statutory language ambiguous, the legislative history is not
decisive of this issue. The Bankruptcy Code’s definition of
“consumer debt” is derived from consumer protection laws.
See S. Rep. No. 95-989 at 22 (1978), reprinted in 1978
U.S.C.C.A.N. 5787, 5808.3 Westberry makes no argument

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