In re: GARY LOUIS GARDNER v. United States of America

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RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 2004 FED App. 0077P (6th Cir.)
File Name: 04a0077p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
In re: GARY LOUIS GARDNER,
Debtor.
_____________________
JEFFREY D. STAMPER,
Executor of the Estate of Gary
Louis Gardner,
Appellant,
v.
UNITED STATES OF AMERICA,
Appellee.
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No. 02-5523
Appeal from the United States District Court
for the Western District of Kentucky at Louisville.
No. 01-00514—John G. Heyburn II, Chief District Judge;
David T. Stosberg, Bankruptcy Judge.
Argued: September 16, 2003
Decided and Filed: March 12, 2004
Before: BOGGS, Chief Judge; KRUPANSKY and CLAY,
Circuit Judges.
2 In re Gardner No. 02-5523
1After the filing of briefs before this court, G ardner died. Pursuant
to Rule 45(a), Rules of the Sixth Circuit, the office of the Circu it Clerk
granted a motion for substitution of Jeffrey D. Stamper, Executor of the
Estate of Gary Louis Gardner for debtor by Order of May 29, 2003. That
substitution did not alter the terms of the dispute.
_________________
COUNSEL
ARGUED: David M. Cantor, SEILLER & HANDMAKER,
Louisville, Kentucky, for Appellant. Marion E.M. Erickson,
UNITED STATES DEPARTMENT OF JUSTICE,
Washington, D.C., for Appellee. ON BRIEF: David M.
Cantor, C. Shawn Fox, SEILLER & HANDMAKER,
Louisville, Kentucky, for Appellant. Marion E.M. Erickson,
Edward T. Perelmuter, UNITED STATES DEPARTMENT
OF JUSTICE, Washington, D.C., for Appellee.
_________________
OPINION
_________________
KRUPANSKY, Circuit Judge. This proceeding seeks to
decide if appellant-debtor Gary Gardner (“Gardner”) may
discharge his income tax liability for the years 1990 and 1991
pursuant to 11 U.S.C. § 523(a)(1)(C) of the Bankruptcy Code
(“Code”). The appellant has challenged the district court’s
affirmance of the bankruptcy court’s determination that his
conduct constituted a willful attempt to evade his tax liability,
thus precluding discharge in a Chapter 7 liquidation. On
appeal, Gardner, and now his estate,1 has urged this court to
conclude that Section 523(a)(1)(C) of the Code does not apply
to attempts to willfully evade or defeat the payment of taxes,
thereby allowing his estate to discharge his tax liability in
bankruptcy. For the reasons indicated below, this court
affirms the district court’s conclusion that the bankruptcy

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No. 02-5523 In re Gardner 3
court did not err in refusing to discharge Gardner’s tax
liability.
The United States instituted an adversary proceeding
against Gardner in the bankruptcy court by filing a complaint
seeking a determination that his unpaid tax liabilities for 1990
and 1991 were excepted from discharge in bankruptcy under
§ 523(a)(1)(C) of the Code. The bankruptcy court determined
the liabilities were excepted from discharge under that
provision because appellant had willfully attempted to evade
or defeat those liabilities. On appeal, the district court
affirmed the bankruptcy court’s determination.
During the relevant period, appellant worked as a personal
injury attorney. He was a partner in the law firm of Gardner,
Ewing & Souza. On August 19, 1991, Gardner filed his 1990
federal income tax return showing an unpaid tax liability of
$90,989. After appellant failed to satisfy that liability,
Revenue Officer Keith Thomas contacted debtor to make
demand for payment. Thomas informed Gardner that if he
did not pay the liability, the Internal Revenue Service (“IRS”)
would commence collection efforts and on April 27, 1992,
Thomas caused a federal tax lien to be filed against debtor.
On June 2, 1992, Gardner, his accountant, and Thomas met
to discuss debtor’s tax delinquencies. The discussion
addressed the debtor’s unpaid tax liabilities for 1990 and
1991. At the meeting, Gardner informed Thomas that his
1991 tax return would be filed showing a tax liability of
approximately $101,000. Gardner assured Thomas he was
working on several cases that could settle within the
following months for which his personal fees would be
sufficient to satisfy the tax obligations.
Thomas requested that Gardner provide him with certain
financial information, noting that failure to provide the
requested information would result in levies on appellant’s
bank accounts and seizure of his partnership interest. Gardner
provided the requested financial information, which included
4 In re Gardner No. 02-5523
2Gardner began using this account in March 199 2 and stopped using
the account sometime in 1993 when he began using a client escrow
acco unt at his law firm for his p ersonal banking needs.
a required Collection Information Statement (“CIS”) and an
analysis of his pending cases. Gardner’s CIS listed only two
bank accounts: First National Bank with a balance of $26.24;
and Pennyrile Bank with a balance of $7.75.
Gardner and Thomas met twice in July, and on
September 28, 1992, appellant submitted an offer to
compromise his tax liabilities for $21,539. Thomas
recommended the compromise offer to the IRS personnel
responsible for processing offers in compromise, indicating
that he believed the amount offered represented the maximum
amount likely to be collected through normal collection
procedures. The IRS rejected the offer in May 1993.
Along with the offer in compromise, appellant submitted
an updated CIS listing the same two bank accounts detailed
on his prior statement, except now one bank account reflected
a zero balance and the other disclosed that it was overdrawn.
Significantly, Gardner did not list a nominee account, in the
name of his secretary and her husband. Gardner used this
account for his personal banking needs, depositing $90,000
between August 31 and September 10, 1992.2
In May 1993, Gardner received a $500,000 distribution
from his law firm attributable to the settlement of a case (the
Victor Robinson case). The appellant did not inform Thomas
about the settlement nor apply any portion of the funds to his
1990 or 1991 tax liabilities. Gardner did, however, use
$209,000 of the distribution to make an estimated federal tax
payment for 1993, and used another part (as much as
$60,000) to pay State tax obligations.
On October 7, 1993, Gardner again submitted to the IRS an
offer to compromise his tax liabilities, this time for $100,000.

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No. 02-5523 In re Gardner 5
3In a telephone conversation, the managing partner advised Thomas
that he would co ope rate with the levy, and would send Thoma s all money
due to appellant including the money from the Cordis settlement, which
he exp ected would be paid to the law firm by Novembe r 15, 199 5.
Appellant accompanied the offer with an updated CIS form,
which failed to list an escrow account at Gardner’s law firm
that debtor used for his personal banking needs. Between
December 1993 and May 1995, Gardner deposited more than
$115,000 into that account. In early 1995 the IRS rejected
Gardner’s second compromise offer.
Shortly after the IRS rejected Gardner’s second
compromise offer, Thomas mailed appellant a final notice of
intent to levy against real and personal property unless the
appellant paid the full amount of his past-due tax liabilities
within 30 days. The levy notice listed Gardner’s total
liability, including penalties and interest, as $343,467.33.
On April 14, 1995, Gardner and his accountant met with
Thomas to discuss satisfying his tax obligations. Gardner
assured Thomas that his law firm expected to receive a fee in
the near future from the settlement of a case (the Cordis case),
and that appellant’s share of that fee would satisfy his tax
liabilities. Gardner advised Thomas to issue a levy on the law
firm to collect debtor’s share of the fee at the appropriate
time. On October 10, 1995, Gardner’s accountant advised
Thomas to serve the levy which instructed the firm to pay
over all property of the appellant, being held by the firm, up
to the total amount of tax due. The managing partner of the
firm responded to the levy by mailing Thomas a check for
$2,707.13, along with a letter stating that the check
represented the sum total of “personal funds” due Gardner
from the law firm’s accounts.3
Subsequent to the IRS levy, Gardner’s firm received its fee
from the Cordis case on December 6, 1995, forwarding none
of the appellant’s share of the $170,000 fee to the IRS, and
instead distributing the fee to appellant in January 1996. In
6 In re Gardner No. 02-5523
response, Gardner deposited $36,000 in another nominee
account maintained in his wife’s former married name and
made a $25,073 contribution to his retirement plan.
On October 30, 1995, soon after the IRS served the levy on
his law firm, Gardner filed a petition for relief under
Chapter 7 of the Bankruptcy Code. Gardner did not list any
cash on hand or bank accounts and he did not list the Cordis
case on a list of pending cases at his law firm that he
submitted to the trustee. Gardner’s bankruptcy case closed on
September 23, 1998.
On March 12, 1999, the United States sought to reopen the
appellant’s bankruptcy proceeding, which the court granted.
On May 5, 1999 the government instituted an adversary
proceeding against Gardner by filing a Complaint to
Determine Dischargeability of his federal income tax
liabilities.
The bankruptcy court conducted a trial on the complaint
that featured testimony by appellant, his accountant, and IRS
officials involved in the case. At the trial, Gardner admitted
that he used nominee accounts to hide his assets from the
State of Kentucky. Debtor also testified that he was aware of
his obligation to pay his 1990 and 1991 federal income taxes,
and that he could have used some of the income he earned
between 1990 and 1996 to pay those taxes.
Keith Thomas testified that he did not become aware of
debtor’s nominee accounts until December 1999, when
Gardner provided a deposition in connection with the instant
litigation. Thomas also testified that he would not have
considered debtor’s original offer in compromise to be bona
fide had he known, at the time, that debtor had deposited
$90,000 in the nominee account belonging to Gardner’s
secretary and her husband shortly before submitting his first
compromise offer. Additionally, John Brandon, the IRS
Offer Specialist responsible for evaluating debtor’s second
offer in compromise, testified that he did not know about

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No. 02-5523 In re Gardner 7
Gardner’s use of the nominee account belonging to his
secretary at the time he evaluated the offer. Brandon testified
that he learned of nominee accounts at Gardner’s law firm
(the former escrow account) and Gardner’s accountant’s firm
while considering the offer in compromise, but had been
unable to obtain any information about those accounts even
after requesting such information.
The United States submitted evidence concerning
Gardner’s profligate lifestyle after he incurred the tax
liabilities for 1990 and 1991. That lifestyle included
numerous golfing junkets throughout the United States,
vacations to Europe and the Caribbean and the yearly
expenditure of over $25,000 to maintain his country club
memberships.
The bankruptcy court determined that the United States had
met its burden of proving that Gardner had willfully
attempted to evade his tax liabilities within the meaning of
Section 523(a)(1)(C). The court pointed to evidence of
Gardner’s “lavish” lifestyle, his concealed nominee accounts
and concluded that appellant had the ability to pay the taxes.
The court also observed that Gardner had “dishonored the
‘tacit agreement’ with Thomas to pay the taxes in full with
the proceeds of a large settlement.” On appeal, the district
court affirmed, concluding that “reasonable and fair
inferences from the evidence” supported the bankruptcy
court’s determination. Gardner made this timely appeal
pursuant to 28 U.S.C. § 158.
On appeal from a bankruptcy court, a district court applies
the clearly erroneous standard of review to findings of fact,
and reviews questions of law de novo. On appeal of a
bankruptcy decision from a district court, this court employs
the same standards, evaluating the bankruptcy court’s
decision directly, without being bound by the district court’s
legal determinations. In re M.J. Waterman & Associates,
Inc., 227 F.3d 604, 607 (6th Cir. 2000); In re Lawrence S.
Charfoos, 979 F.2d 390, 392 (6th Cir. 1992).
8 In re Gardner No. 02-5523
Pursuant to Chapter 7 of the Bankruptcy Code, a debtor is
generally granted discharge from debts that arose prior to the
filing of the bankruptcy petition. See 11 U.S.C. § 727(b).
However, that general rule faces various exceptions set forth
in Section 523 of the Code. Pertinent to the instant action,
Section 523(a)(1)(C) provides:
(a) a discharge under § 727, . . . of this title does not
discharge an individual debtor from any debt--
(1) for a tax or customs duty--
(c) with respect to which the debtor made a
fraudulent return or wilfully attempted in
any manner to evade or defeat such tax.
11 U.S.C. § 523(a)(1)(C). That exception serves to limit the
Bankruptcy Code’s discharge of tax debts to the honest but
unfortunate debtor. Grogan v. Garner, 498 U.S. 279, 286-87
(1991).
The Sixth Circuit has interpreted the Code’s phrase
“wilfully attempted in any manner to evade or defeat such
tax” as requiring a voluntary, conscious, and intentional
evasion. In re Toti, 24 F.3d 806, 809 (6th Cir.), cert. denied,
513 U.S. 987 (1994). This court’s opinion in Toti cast a wide
net, concluding that § 523(a)(1)(C) included attempts to
thwart payment of taxes. See United States v. Sumpter, 64
F.3d 663, 1995 WL 501947 at *3 (6th Cir. Aug. 22, 1995)
(unpublished) (noting that the “unambiguous language of the
statute” encompasses attempts to thwart taxes). Thus, Toti
clarified that § 523(a)(1)(C) covered both acts of omission,
such as failure to file returns and failure to pay taxes, and acts
of commission, such as affirmative acts of evasion. Toti, 24
F.3d at 809. Moreover, while nonpayment alone is
insufficient to bar discharge of a tax obligation, a “knowing
and deliberate” nonpayment provides the basis for
determining that the tax debt is non-dischargeable. See In re
Birkenstock, 87 F.3d 947, 952 (7th Cir. 1996).

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No. 02-5523 In re Gardner 9
The government must prove by a preponderance of the
evidence that the debtor willfully attempted to evade the tax
liability. Section 523(a)(1)(C) renders a tax debt non-
dischargeable where the debtor willfully attempted to evade
or defeat payment of the taxes, even though the debtor, as in
the instant case, did not attempt to defeat the assessment of
the taxes. In re Griffith, 206 F.3d 1389, 1396-97 (11th Cir.
2000).
The case law has divided the analysis into two segments–
a conduct requirement and a mental state requirement. United
States. v. Fretz (In re Fretz), 244 F.3d 1323, 1327-29 (11th
Cir. 2001). The government satisfies the conduct requirement
when it proves the debtor engaged in affirmative acts to avoid
payment or collection of the taxes. Placing assets in the name
of others, as Gardner did in this case by using nominee
accounts for depositing large sums of his income, amounts to
an affirmative act of tax evasion. See United States v. McGill
964 F.2d 222, 230 (3d Cir. 1992). Under the mental state
requirement, the government must prove the debtor
voluntarily, consciously, and knowingly evaded payment.
Toti, 24 F.3d 809. The mental state requirement is proven
when the debtor:
(1) had a duty to pay taxes;
(2) knew he had such a duty; and
(3) voluntarily and intentionally violated that duty
Fretz, 244 F.3d at 1330.
The bankruptcy court concluded that the government had
proved Gardner’s intent to evade payment of the taxes by
proving (1) that the debtor lived lavishly during the period of
time the IRS sought to collect the tax liability, (2) that
Gardner used nominee bank accounts to conceal from the IRS
large deposits of income not reflected on the required
financial statements, and (3) that the appellant had the ability
to pay the taxes.
10 In re Gardner No. 02-5523
4Mo reover, five other Circuits have re jected Haas’s narrow
interpretation that § 523(a)(1)(C) of the Co de do es not encompass
attemp ts to evade or defeat the paym ent of taxes. See Griffith, 206 F.3d
at 1393. citing In re Fegeley, 118 F.3d 979, 983 (3d Cir.1997); In re
Birkenstock, 87 F .3d 9 47, 9 51-5 2 (7th Cir.1996 ); Dalton v. IRS, 77 F.3d
1297, 130 1 (10th Cir.199 6); In re T udisco, 183 F.3d 133, 137 (2d
Cir.1999 ); In re Bruner, 55 F.3d 1 95, 2 00 (5th Cir.199 5).
On appeal, Gardner has argued that this court should
decline to follow its own precedent enunciated in In re Toti.
Gardner has urged this court to find Toti inapplicable because
it involved an attempt to defeat the assessment of a tax and
not an attempt to defeat the payment of a tax. Instead,
Gardner has suggested adopting the reasoning of In re Haas,
48 F.3d 1153 (11th Cir. 1995), concluding that § 523(a)(1)(C)
does not apply to attempts to evade or defeat the payment of
taxes only their assessment.
Gardner’s argument fails for several reasons. First, the
court in Toti refused to distinguish between the payment and
assessment of a tax liability for purposes of discharge under
§ 523(a)(1)(C), stating that “[t]he district court correctly held
that failure to file a tax return and failure to pay a tax fall
within the definition in § 523(a)(1)(C) of a willful attempt to
evade or defeat a tax liability.” Toti, 24 F.3d at 809. Second,
this court is bound by the published opinion in Toti. See
United States v. Roper, 266 F.3d 526, 530 (6th Cir. 2001).
Third, Haas simply no longer reflects the applicable law in
the Eleventh Circuit, having been overruled by a unanimous
en banc opinion of the Eleventh Circuit. In re Griffith, 206
F.3d 1389, 1392 (11th Cir. 2000).4
Moreover, Gardner’s reliance on In re Sonnenberg, 148
B.R. 35 (N.D. Ill. 1992), and In re McDonald, 249 B.R. 312
(E.D. Mo. 1999), is misplaced. In those two cases the
bankruptcy courts held that the government failed to meet its
burden of proving the debtors had willfully attempted to
evade or defeat payment of their taxes. Unlike appellant’s
conduct in the instant case, neither Sonnenberg nor McDonald

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No. 02-5523 In re Gardner 11
engaged in acts to prevent collection of their unpaid taxes,
such as the use of nominee accounts, or the intentional
fabrication of financial information submitted to the IRS.
Sonnenberg, 148 B.R. at 38; McDonald, 249 B.R. at 318.
Accordingly, those decisions do not undermine the
bankruptcy court’s factual determination, in the instant case,
that Gardner had willfully attempted to evade or defeat
payment of his tax liabilities.
The evidence in the record supports the bankruptcy court’s
determination that Gardner attempted to evade or defeat
payment of his tax liabilities. The debtor concealed assets
from the IRS by using several nominee accounts and by
failing to disclose his use of those accounts in a prompt
manner to agency officials. See In re Birkenstock, 87 F.3d at
951 (“where nonpayment is coupled with . . . measures to
conceal assets from the IRS . . . a court may reasonably find
that the debtor sought to ‘evade or defeat’ his tax liabilities”);
Dalton v. IRS, 77 F.3d 1297, 1302 (10th Cir. 1996). See also
United States v. McGill, 964 F.3d 222, 230 (3d Cir. 1992)
(finding that nominee accounts are well known devices to
shield assets from the tax authorities). In the instant case,
appellant used a checking account belonging to his secretary
and her husband into which he deposited approximately
$90,000 during August and September 1992. Gardner also
used a client escrow account at his law firm into which he
deposited more than $200,000 between December 1993 and
October 1995. Debtor additionally used an account set up by
his accountant in 1993. Finally, in 1995 and 1996 Gardner
used an account in his wife’s former married name into which
he deposited more than $100,000.
On appeal, Gardner has asserted that the United States
should be equitably estopped from challenging the
dischargeability of his 1990 and 1991 tax liabilities. This
argument lacks merit. First, the Supreme Court has left open
the question of whether equitable estoppel may ever lie
against the government. Office of Personnel Management v.
Richmond, 496 U.S. 414, 419 (1992). Second, even assuming
12 In re Gardner No. 02-5523
5To the contrary, accord ing to the record evidence, Keith Thomas,
the IRS collection agent assigned to debtor’s case, did not learn about the
nominee accounts until 1999, during the course of the instant litigation.
W hile John Brandon, the IRS Offer Specialist who eva luated Gardner’s
second offer to compromise his tax liabilities, learned of the nominee
account at the law firm and that set up by Gardner’s accountant, he never
received information about those accounts from the debtor even though
he req uested information o n several occasions.
that estoppel may lie against the government in some
circumstance, “[a]t the very minimum, some affirmative
misconduct by a government agent is required as a basis of
estoppel.” United States v. Guy, 978 F.2d 934, 937 (6th Cir.
1992). The record has provided no evidence of affirmative
misconduct by IRS agents handling Gardner’s case.5
Debtor has further contended that the IRS “did not care
about the inconsequential sums of money” in those accounts
and never intended to collect his liabilities from those
accounts. This contention finds no support in the record.
These accounts held nearly $400,000 between 1992 and 1995,
a not inconsequential sum. Moreover, the notion that the IRS
would not have looked to the nominee accounts to satisfy
Gardner’s outstanding tax liabilities had it known of the large
sums deposited defies common sense and garners no support
from the testimony of IRS officials involved in the case.
Keith Thomas, for instance, testified that he would not have
processed either of debtor’s settlement offers had he known
about the debtor’s $90,000 deposit into the nominee account
belonging to debtor’s secretary, or had he known about the
$500,000 Gardner received in May 1993.
Gardner has also maintained that the financial forms he
submitted to the government did not require him to disclose
the existence of the nominee accounts because those forms
sought only information about accounts held in appellant’s
own name. Contrary to appellant’s assertion, the CIS form
does not provide taxpayers with the kind of loophole
suggested by Gardner, but requests instead all information

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No. 02-5523 In re Gardner 13
6Although Gardner used $20 9,00 0 of the Robinson settlement to
make an estimated tax payment for 1993 and he may have used $60,000
of the amount to pay State taxes, he did not use any portion of the
remaining $231,000 to pay his 1990 or 19 91 taxes. In his appellate brief,
debtor contends that he allocated $100,000 of the distribution he received
from his law firm to fund the offer in comp romise that was pen ding
before the IRS. That statem ent is at od ds with the debtor’s testimony in
the bankruptcy court that he wo uld have had to borrow the $100 ,000 if the
offer had been accepted.
7Gardner informed Keith Thomas in April 1995 o f his firm’s
representation of a plaintiff in the $21 million Cordis class-action lawsuit.
Appellant testified that he had explained to Thom as that he was not the
working attorney nor the originating attorney with respect to the Cordis
case. After Gardner led Th omas to believe that his law firm would not
pay debtor h is 4 0% share of the anticipated contingency fee to the
partnership, Thomas issued a levy on the partnership. Gardner
subsequently filed this bankruptcy case and, contrary to his representation
to Thomas, ultimately collected his share of the settlement proceeds
($170,000) from his law firm. Rather than dismiss this bankruptcy case
and use those funds to fulfill his promise to T homas to satisfy his
obligations to the IRS, debtor pocketed the settlement proceeds and
sought to have his tax obligations discharged in bankruptcy. The
bankruptcy court not only found Gardner’s explanation with regard to the
levy “disingenuous,” as avoiding the question of why Gardner dishonored
his agreement with Thomas, but also found the timing of the bankruptcy
relevant to a person’s financial condition, including “cash”
and “recent transfers of assets for less than full value” –
categories that encompassed the money Gardner was
depositing into the nominee accounts.
Moreover, Gardner not only used the nominee accounts to
shield his assets from the IRS, he additionally failed to honor
his commitment to the IRS to use funds obtained from the
settlements of large cases to satisfy his liabilities. Gardner’s
receipt of $500,000 in May 1993, attributable to the
settlement of the Robinson case was not used to pay his
outstanding 1990 or 1991 taxes.6 Indeed, debtor did not even
inform the government of the Robinson settlement.
Gardner’s failure to apply any monies from that settlement, or
from the Cordis settlement,7 to his outstanding liabilities in
14 In re Gardner No. 02-5523
filing “suspect,” when two months after filing G ardner received his
distribution generated by the Cordis settlement. As further evidence of
evasive conduct, Gardner, in providing a list of pending cases requested
by the trustee in the bankruptcy case, o mitted the Co rdis settlem ent.
question constituted an “omission” that demonstrated the
conduct element of Section 523(a)(1)(C), because he
persuaded the Revenue Agents to defer collection activity
with respect to those liabilities by promising to pay the
outstanding amount with proceeds received from the
settlements of his pending cases.
Finally, Gardner had the financial means to meet his
outstanding tax liabilities. In reviewing Gardner’s
expenditures during the collection period, between September
1992 and June 1995, the bankruptcy court noted twenty
golfing and vacation trips upon which appellant lavished
substantial sums. Gardner has contended on appeal that the
bankruptcy court erred by refusing to credit his testimony that
most of the trips were business related. However, the
bankruptcy court was not obligated to accept Gardner’s
characterization of his activities. See Lovell and Hart, Inc. v.
Commissioner, 456 F.2d 145, 148 (6th Cir. 1972) (court not
required to credit self-serving testimony, even if
uncontradicted, if it finds the testimony improbable,
unreasonable, or questionable). In the instant case, appellant
failed to introduce any evidence that he claimed business-
expense deductions for the expenses he incurred on his
vacations. Moreover, a careful review of the evidence
adduced at trial demonstrated that any business-related
activities engaged in by appellant were insubstantial in
comparison to his recreational activities.
The evidence in the record also supports the mental state
requirement of § 523(a)(1)(C) that Gardner “willfully”
avoided payment of his tax liabilities for 1990 and 1991.
Appellant acknowledged before the bankruptcy court that he
was aware of his legal responsibility to pay the taxes in issue.

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No. 02-5523 In re Gardner 15
Gardner also testified he could have used some of the $688,
932 he earned in 1993 to pay his 1990 and 1991 taxes, but
that he made a conscious decision not to apply the monies
toward his tax debt. Given these facts, the bankruptcy court
properly found that Gardner acted “willfully” with respect to
his 1990 and 1991 tax obligations for purposes of
§ 523(a)(1)(C), precluding discharge of his tax liabilities.
Consequently, this court affirms the bankruptcy court’s
determination.

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