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IN RE MORGAN

Civil Action No. 95-135.

196 B.R. 758 (1996)

In re Alan D. MORGAN and Pamela T. Morgan, Debtors. UNITED STATES of America on Behalf of the INTERNAL REVENUE SERVICE, Appellant, v. Alan D. MORGAN and Pamela D. Morgan, Appellees.

United States District Court, E.D. Kentucky, at Lexington.

February 7, 1996.

Attorney(s) appearing for the Case

Stephen Palmer, Lexington, KY, Jonathan L. Gay, McDonald, Walther & Roark, Lexington, KY, James O. Springate, Versailles, KY, for Alan D. Morgan, Pamela T. Morgan.

David E. Middleton, U.S. Attorney's Office, Lexington, KY, Charles H. Keen, U.S. Department of Justice, Tax Division, Washington, DC, for U.S. on Behalf of IRS.

Stephen Palmer, Trustee, Lexington, KY, pro se.

Jonathan L. Gay, McDonald, Walther & Roark, Lexington, KY, for Stephen Palmer.

MEMORANDUM OPINION AND ORDER

WILHOIT, District Judge.

This matter is before the Court on appeal from an Order of the United States Bankruptcy Court pursuant to 28 U.S.C. § 158.

I.

FACTUAL AND PROCEDURAL BACKGROUND

On April 15, 1994, Appellees Alan and Pamela Morgan, filed a Chapter 7 Petition in Bankruptcy. On or about May 6, 1994, Appellant the United States Internal Revenue Service setoff the Appellees' 1993 federal...

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