This case is an attempt by chapter 7 debtors to avoid or limit a federal tax lien on the debtor Gary Miranda's interest in a pension plan. I find for the defendant United States.

Factual Background

        The facts of this case are not in dispute. On August 21, 1987, the date of his chapter 7 filing, Gary Miranda had $43,273.44 on account in his Pool Arctic Alaska 401(k) pension plan. The IRS had filed pre-petition tax liens well in excess of that amount. The debtors seek to avoid or limit the amount of the federal tax lien under 11 U.S.C. § 506(d). The debtors also seek a determination as to the dischargeability of the tax.

Jurisdiction

        The court, on its own motion, had the parties brief the court's subject matter jurisdiction over this controversy. After a review of the applicable authorities, I conclude that this court had subject matter jurisdiction.

        In this case the debtors' chapter 7 estate has been fully administered. The debtors' interest in the pension plan has been abandoned to the debtors. Under similar facts the court in In re Israel, 112 B.R. 481 (Bankr. D. Conn. 1990) concluded that there was no subject matter jurisdiction under 28 U.S.C. § 157(b)(2)(K), which grants jurisdiction to determine the validity and extent of liens. I will not follow Israel in this instance.

        The flaw in Israel was the court's reliance on three cases far removed from dischargeability and § 506(d) determinations: In re Coan, 95 B.R. 87 (Bankr. N.D. Ill. 1988), In re Holland Industries. Inc., 103 B.R. 461 (Bankr. S.D.N.Y. 1989) and In re Edwards, 106 B.R. 161 (Bankr. N.D. Ill. 1989). Coan involved an attempt by a third party plaintiff to foreclose a mechanic's lien on property not owned by the debtor or the debtor's estate. Holland Industries concerned a debtor's attempt to obtain an order vacating liens filed by the IRS against property owned by non-debtors. The debtor sought to litigate the validity of liens in which it had no cognizable interest. In Edwards a lien dispute between mortgagees arising after the sale of property subject to     2 ABR 124  their lien was at issue. Not one of these cases involved issues of dischargeabity where the debtor retained property. Not one of these cases involved application of § 506(d) by the debtor in an attempt to invalidate a lien. Although the rulings declining to find jurisdiction in the respective cases were appropriate, the Israel court's reliance upon these cases in a § 506(d) proceeding was incorrect.

        This matter is a core proceeding. The case under consideration here relates not only to a determination of dischargeability of debt under 28 U.S.C. § 157(b)(2)(I) but the interrelationship between a determination of dischargeability under subsection (I) and the validity of a lien under subsection (K). Additionally, this action affects an adjustment of the debtor-creditor relationship under subsection (O). That adjustment goes to the ability of the United States to reach a debtor's beneficial interest in a pension plan following discharge. Moreover, the list of core proceedings in 28 U.S.C. § l57(b)(2) is not exclusive. "Core proceedings include, but are not limited to . . ." the list of proceedings found in 28 U.S.C. § 157(b)(2)(A) - (0). An action by a debtor to invalidate a lien through the bankruptcy laws on property abandoned to him is a core proceeding. While an abandonment of property by a trustee may properly result in a loss of jurisdiction by a court in some cases, it is inappropriate when issues relating to discharge and the effect of discharge under 11 U.S.C. § 506(d) are presented by the debtor.

Dischargeability and Tax Lien

        The United States concedes that all pre-petition taxes of the debtors were discharged and are not subject to exception from discharge. Partial summary judgment for the plaintiffs on that point is appropriate.

        Gary Miranda's interest in the Pool Arctic Alaska 401(k) plan is secured by a federal tax lien. In re Anderson, 2. A.B.R. 82, adversary no. 3-87-00859-001 (Bankr. D. Alaska 1991). The debtors concede the validity of the tax lien. The debtors, however, contend that there is a need for a valuation hearing. I disagree. There is no need for a valuation hearing on the extent of the IRS's secured claim because there is no chapter 7 cramdown in Alaska. In re Larson, 99 B.R. 1 (Bankr. D. Alaska 1989); In re Lange, 120 B.R. 132 (9th Cir. BAP 1990). Because there is no cramdown, to the extent the debtors' beneficial interest in the Pool Arctic Alaska 401(k) plan increases in value post-discharge, it remains fully subject to the federal tax lien. The plaintiffs' discharge does not fix or limit the amount of the tax lien. It only limits their personal liability under 11 U.S.C. § 524(a)(2). Even though the value of debtor Gary Miranda's beneficial interest in the plan may fluctuate, it remains subject to the lien. The plaintiffs cannot defeat the effect of a federal tax lien through a bankruptcy discharge. In re Isom, 901 F.2d 744 (9th Cir. 1990).

        Therefore, IT IS HEREBY ORDERED:

        1.   Partial summary judgment shall be entered for the plaintiffs finding the debt of the plaintiffs to the United States of America for income taxes for the years 1978 through 1983 together with penalty and interest thereon to be discharged;

        2.    Insofar as the plaintiffs' motion for summary judgment seeks a determination that the federal tax lien of the Internal Revenue Service upon debtor Gary Miranda's beneficial interest in the Pool Arctic Alaska 401(k) plan is avoided, it is denied;

        3.    The defendant's motion for summary judgment is granted and plaintiffs' complaint is dismissed with prejudice insofar as it seeks to limit or eliminate the lien of the United States relative to the debtors' interest in the Pool Arctic Alaska 401(k) plan; and

        4.    Each party shall bear their own costs and attorney's fees.

        Judgment shall be entered and docketed accordingly.

        DATED:   September 25, 1991.

BY THE COURT




DONALD MacDONALD IV
United States Bankruptcy Judge