What is the test for dischargeability of a non-dischargeable section of the Income Tax Act?

MultiRegion, United States of America

The following excerpt is from In re Foto, 258 BR 567 (Bankr. S.D.N.Y. 2000):

A second issue that merits mentioning is the standard by which courts should evaluate a debtor's "ability to pay" under subsection (A). Unlike subsection (B), the meaning and intent of subsection (A) are relatively clear. If after paying his "reasonably necessary" personal and business expenses a debtor has assets or income to pay the obligation in question, it is non-dischargeable. For this purpose, however, the determination of a debtor's ability to pay is not limited by the debtor's lifestyle or other choices which restrict his funds left over after he pays his bills. See, Mandanici v. Slygh (In re Slygh), 244 B.R. 410, 416 (Bankr.N.D.Ohio 2000).

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