In re Addison, ___BR___ (Bankruptcy. Court E.D.N.Y., 2018)
Held, individual chapter 7 debtor is entitled to deduct payments for two motor vehicles; IRM is helpful but not controlling.
In a complicated opinion the court addressed the binding and non-binding use of the Internal Revenue Manual guidelines for allowable expenses, and other resources to determine how much the debtor may deduct for motor vehicles.
“Pending before the Court is the United States Trustee’s motion to dismiss the chapter 7 bankruptcy case of Barry Addison, solely as a presumed abuse case pursuant to 11 U.S.C. § 707(b)(2). The UST asserts that Debtor, an above-median income, single-person-household debtor, improperly claimed certain deductions on his chapter 7 means test, and that after adjusting for the improper deductions, Debtor’s case is presumptively abusive and should be dismissed. The deductions at issue are for operating two vehicles, an older vehicle, and an overstated tax liability. Debtor asserts all of the deductions on his means test are proper and that the presumption of abuse does not arise.
“Thus, in conformity with Ransom, in a presumed abuse case, a court may consult the IRS Handbook for guidance where the National or Local Standards either directs the court to do so, or where the standards are vague or unclear as to the amount to be claimed, or where the debtor must substantiate special circumstances, or where the expense at issue is one for which the Code provides that a debtor may only take a deduction which is “reasonable.”
“Here, for purposes of § 707(b)(2)(A)(ii)(I), as Debtor actually incurs an operation expense for two or more vehicles, in accordance with the Code, Rules, Form 122A-2, and the Local Standards, Debtor is entitled under lines 11 and 12 to a vehicle operation deduction for two vehicles in the total amount of $616.00.
Note that Bankruptcy cases are not binding on any other judge, not even on other bankruptcy judges. Bankruptcy judge decisions are only “persuasive”. However, the above reasoning seems sound.