Appeal from the United States District Court for the Middle District of Florida. (No. 94-2001-CIV-T-17C). Elizabeth A. Kovachevich, Chief Judge.
Before Kravitch and Carnes, Circuit Judges, and Hill, Senior Circuit Judge.
HILL, Senior Circuit Judge:
In this case we decide whether a debtor's federal income tax liabilities and penalties, asserted by the Commissioner of the Internal Revenue Service (Commissioner) in a statutory notice of deficiency and the subject of dispute in a Tax Court petition filed by the debtor, are liquidated unsecured debts for Bankruptcy Code Chapter 13 eligibility purposes. The bankruptcy court concluded they were not. The district court affirmed. We disagree and reverse.
I. FACTUAL AND PROCEDURAL BACKGROUND
The Commissioner issued a deficiency notice*fn1 to Thomas B. Verdunn claiming income tax deficiencies, interest, and penalties for 1982-1986. Verdunn filed a petition in the Tax Court declaring that these claims were erroneous. One month prior to the date set for the Tax Court trial, Verdunn filed a voluntary petition for relief under Chapter 13 with the bankruptcy court.*fn2 Commissioner filed a proof of claim in the bankruptcy proceeding, claiming $297,000 in total unsecured debts. On the ground that Verdunn's unsecured debts exceeded the $100,000 Chapter 13 eligibility limits,*fn3 the Commissioner objected to confirmation of the proposed Chapter 13 plan and moved to dismiss the bankruptcy petition. The bankruptcy court found that, inasmuch as Verdunn disputed his tax liabilities, and, inasmuch as his underpayment of taxes was alleged to be entirely due to fraud (with the Commissioner bearing the burden of proof), the tax debts were unliquidated. It denied the Commissioner's motion to dismiss and confirmed Verdunn's Chapter 13 plan. The bankruptcy court lifted the automatic stay to allow the Tax Court litigation to proceed.*fn4
The Commissioner appealed the bankruptcy court's order to the district court.*fn5 The district court affirmed the bankruptcy court. This appeal followed.*fn6
The proper construction of the bankruptcy code by a bankruptcy court or a district court is a matter of law. The interpretations are subject to de novo review. In re Haas, 48 F.3d 1153, 1155 (11th Cir.1995), citing In re Colortex Industries, Inc., 19 F.3d 1371, 1374 (11th Cir.1994) and In re Taylor, 3 F.3d 1512, 1514 (11th Cir.1993).
A. The Bankruptcy Statute--Section 109(e)
For purposes of this appeal, the eligibility requirements of Chapter 13 provide that: "Only an individual with regular income that owes, on the date of the filing of the petition, non-contingent,*fn7 liquidated, unsecured debts of less than $100,000... may be a debtor under chapter 13 of this title." 11 U.S.C. § 109(e) (1988) (emphasis added).*fn8
B. The Orders Interpreting ...