In the

United States Court of Appeals
              For the Seventh Circuit

No. 07-2503

IN RE:

    M ARVIN R OSS-T OUSEY AND D EBORAH T OUSEY,

                                                          Debtors.
M ARVIN R OSS-T OUSEY AND D EBORAH T OUSEY,

                                             Debtors-Appellants,
                               v.

W ILLIAM T. N EARY,
                                United States Trustee-Appellee.


           Appeal from the United States District Court
              for the Eastern District of Wisconsin.
           No. 07-C-65—William C. Griesbach, Judge.



   A RGUED S EPTEMBER 5, 2008—D ECIDED D ECEMBER 17,2008




  Before F LAUM, R OVNER, and W ILLIAMS, Circuit Judges.
  F LAUM, Circuit Judge. This appeal involves two juris-
dictional issues as well as interpretation of a provision of
the Bankruptcy Abuse Prevention and Consumer Protec-
tion Act of 2005 (“BAPCPA”). With regard to the bank-
2                                                No. 07-2503

ruptcy issue, this Court must resolve whether an
above-median-income debtor who has no monthly
vehicle loan or lease payment can claim a vehicle owner-
ship expense deduction when calculating his disposable
income. For the reasons explained below, we reverse
the district court.


                      I. Background
   The debtors, Marvin Ross-Tousey and Deborah Tousey,
filed a voluntary bankruptcy petition under chapter 7 of
the Bankruptcy Code on August 18, 2006. The debtors
live in Mattoon, Wisconsin and are each longstanding
employees of the Mohican North Star Casino in Bowler,
Wisconsin. In connection with their bankruptcy filing, the
debtors reported household income above the ap-
plicable state median income level.
  BAPCPA subjects above-median-income debtors to a
means test. The purpose of the means test is to dis-
tinguish between debtors who can repay a portion of
their debt and debtors who cannot. Under the means test,
if a debtor has enough disposable income to pay his
unsecured creditors at least $166.67 1 each month (that is, at
least $10,000 over five years), the debtor usually should
proceed under Chapter 13, which allows for a partial
repayment of debt. If the debtor has $166.67 or more



1
  This dollar amount was increased under 11 U.S.C. § 104
effective April 1, 2007, but the increased amount does not
apply in this case.
No. 07-2503                                            3

of disposable income under the means test, proceedings
under Chapter 7—which allows for a complete discharge
of debt—are considered presumptively abusive. See 11
U.S.C. § 707(b)(2)(A)(ii)(I).
  The means test uses a formula to determine a debtor’s
ability to pay a portion of his debts. Essentially, the
means test takes the debtor’s current monthly income
(“CMI”) and reduces it by amounts corresponding
to allowed monthly expenses set out in 11 U.S.C.
§ 707(b)(2)(A)(ii)-(iv). Pertinent to this appeal, under
§ 707(b)(2)(A)(ii)(I), debtors are permitted to deduct
   the debtor’s applicable monthly expense amounts
   specified under the [Internal Revenue Service’s]
   National Standards and Local Standards, and the
   debtor’s actual monthly expenses for the categories
   specified as Other Necessary Expenses issued by the
   Internal Revenue Service for the area in which the
   debtor resides . . . . Notwithstanding any other pro-
   vision of this clause, the monthly expenses of the
   debtor shall not include any payments for debts.
  In performing their means test, the debtors here
claimed the Internal Revenue Service (“IRS”) Local Stan-
dard vehicle operating/public transportation allowance
of $358 as well as the IRS Local Standard vehicle owner-
ship allowance of $803 (for two vehicles). With these
expenses subtracted from their CMI, the debtors’ means
test resulted in a finding that they had no disposable
income. The debtors thus claimed that the presumption
of abuse did not arise in their case and that they should
be able to discharge their debts under Chapter 7.
4                                               No. 07-2503

   On October 30, 2006, the United States Trustee (“UST”)
filed a motion to dismiss the debtors’ case for abuse
under section 707(b). Originally, the UST filed the
motion under 11 U.S.C. § 707(b)(3)(B), asserting that the
debtors’ chapter 7 petition was abusive based upon the
totality of the circumstances of the debtors’ financial
situation. A few days later—after the deadline set by
§ 704(b)(2) for UST motions to dismiss had passed—the
UST supplemented its October 30 motion to dismiss,
asserting that the case also merited a presumption of
abuse under section 707(b)(2) because the debtors should
not have taken the $803 Local Standard vehicle ownership
deduction. On December 14, 2006, the bankruptcy court
denied the UST’s motion to dismiss, concluding that the
totality of the circumstances did not establish abuse and
that no presumption of abuse arose under section 707(b)(2)
due to the vehicle ownership deduction. The bankruptcy
court interpreted section 707(b)(2)(A)(ii)(I) to allow the
debtors to take the vehicle ownership deduction even
though the debtors had no monthly loans or leases on
their vehicles.
  The UST appealed and the district court reversed with
regard to the section 707(b)(2) presumption of abuse,
holding that the debtors could not claim the vehicle
ownership deduction under section 707(b)(2)(A)(ii)(I) for
vehicles the debtors owned outright. See Neary v.
Ross-Tousey (In re Ross-Tousey), 

, 768 (E.D. Wis.
2007). (The district court did not address the UST’s alterna-
tive argument, made under section 707(b)(3)(B), that the
totality of the debtors’ circumstances demonstrated abuse.)
The district court therefore concluded that the presump-
No. 07-2503                                                5

tion of abuse arose in the debtors’ case and remanded to
the bankruptcy court for further proceedings to determine
whether the debtors could rebut the presumption of
abuse. 

  The debtors appealed to this court. The UST moved to
dismiss the appeal for lack of finality because the bank-
ruptcy court had not yet determined whether the debtors
had special circumstances sufficient to rebut the presump-
tion. However, the debtors responded by stating that they
had no special circumstances to raise on remand. Due to
that concession, the UST agreed that this Court had
jurisdiction in its reply brief. This Court denied the UST’s
motion to dismiss the appeal on February 15, 2008.


                      II. Discussion
A. Jurisdiction
  Before turning to the merits of this appeal, the Court
addresses two jurisdictional questions.


  1. Finality
  The first jurisdictional question is whether there is a
final order appropriate for appellate review in this case.
This court has jurisdiction over “appeals from all final
decisions, judgments, orders, and decrees entered” by a
district court pursuant to its review of final decisions of a
bankruptcy court. 28 U.S.C. § 158(d)(1). In other words,
we have jurisdiction only “if both the bankruptcy court’s
order and the district court’s order reviewing that
original order are final decisions.” Zedan v. Habash, 529
6                                               No. 07-2503

F.3d 398, 402 (7th Cir. 2008) (citing In re Salem, 

, 771 (7th Cir. 2006)). There are thus two questions to
address regarding finality in this case: (1) whether the
bankruptcy court made a final decision when it denied
the UST’s motion to dismiss, and (2) whether the dis-
trict court made a final decision when it reversed that
determination.
  With regard to the first question, normally a denial of a
motion to dismiss is not an appealable final order. See
Hammond v. Kunard, 

, 695 (7th Cir. 1998).
However, the Seventh Circuit has observed that finality
in the bankruptcy context is considerably more flexible
than in an ordinary civil appeal. See 

.
Finality does not require the termination of the entire
bankruptcy proceeding; rather, an adjudication by the
bankruptcy court “is definitive because it cannot be
affected by the resolution of any other issue in the pro-
ceeding, and therefore no purpose would be served by
postponing the appeal to the proceeding’s conclusion.” In
re Oakley, 

, 711 (7th Cir. 2003) (district court
order that overturned bankruptcy court’s order sus-
taining trustee’s objection was final and appealable be-
cause “it definitely adjudicated the debtor’s entitlement
to a definite amount of money”). We have also held that
“[a]n impending ministerial act does not make a decision
non-final, for routine action on remand is unlikely to
precipitate a later appeal.” In re A.G. Financial Service
Center, Inc., 

, 413 (citing In re Lopez, 

, 1192 (7th Cir. 1997)).
  Here, the bankruptcy court denied the UST’s motion
to dismiss under sections 707(b)(2) and 707(b)(3)(B). This
No. 07-2503                                                      7

decision resolved all of the contested issues on the merits
and left only the distribution of estate assets to be com-
pleted. Because distribution of assets is a ministerial act,
see In re Official Comm. of Unsecured Creditors, 

(7th Cir. 1991), the denial of the motion to dismiss was
appropriate for appeal to the district court. See also In re
Wade, 

, 406 (7th Cir. 1993) (“A final order in
a bankruptcy case, [sic] is one that resolves all contested
issues on the merits and leaves only the distribution of
the estate assets to be completed.”).2



2
  We agree with the UST that a finding of jurisdiction in this
case is not contrary to In re Jartran, Inc., 

(7th Cir.
1989) or In re Vlasek, 

(7th Cir. 2003). In Jartran,
we held not final an order denying a creditor’s request for
administrative priority and for dismissal of a second Chapter 11
petition because “a considerable number of potential disputes
between Jartran and [the creditor] remain[ed] unresolved” and
“resolution of these claims [would have been] more than a
mere ‘ministerial’ matter.” 

. This case
is distinguishable from Jartran because here there are no
unresolved disputes. In Vlasek, this court found that the denial
of a motion to dismiss a Chapter 11 case was not final. However,
in that case, the parties apparently did not make a “compelling
argument addressing why” the court should allow the denial
to be appealed. 

. More importantly, in
Vlasek, after denying the motion to dismiss, the bankruptcy
court made orders of a non-ministerial nature approving the
sale of property and approving of the estate’s final accounting,
undermining the contention that the denial of the motion to
dismiss was appropriate to review as a final appealable order.
                                                     (continued...)
8                                                   No. 07-2503

  The district court’s order was also final and appealable.
As mentioned above, the district court reversed the
bankruptcy court’s denial of the motion to dismiss and
remanded to the bankruptcy court for further proceedings.
See 

. Normally an order
dismissing a case is appealable; the issue here is whether
the district court’s remand to the bankruptcy court made
the district court’s order “non-final.” We have held that
“even if the decision of the bankruptcy court is final, a
decision by the district court which remands the case to
the bankruptcy court for further proceedings is not final
unless the contemplated further proceedings are of a
purely ministerial character . . . .” 

; see also In re Fox, 

, 55 (7th Cir. 1985) (a
district court order remanding the case to the bankruptcy
court may qualify as final if “all that remains to do on
remand is a purely mechanical, computational, or in
short ‘ministerial’ task, whose performance is unlikely
either to generate a new appeal or to affect the issue that
the disappointed party wants to raise on appeal from the
order of remand”). Here, the district court reversed and
remanded to the bankruptcy court, which had yet to



2
  (...continued)

Finally, Vlasek was a quite unusual case, involving
a debtor who moved to dismiss his bankruptcy petition over
two years after it was filed, claiming—in an obvious attempt
to avoid an imminent loss of property—that he was mentally
incompetent at the time at the time of the bankruptcy filing
and that his mother had signed the bankruptcy petition with-
out his permission. 

No. 07-2503                                                 9

determine whether the debtors had special circumstances
sufficient to rebut the presumption of abuse under
section 707(b)(2). However, the debtors appealed to this
court. When the UST moved to dismiss the appeal due
to the issue pending on remand, the debtors responded
by stating that they had no special circumstances to raise
on remand. Because debtors have stipulated that no
special circumstances exist, it appears that the only task
for the bankruptcy court on remand would be to allow the
petitioners to convert their petition to a chapter 13 pro-
ceeding or dismiss the case. Since the decision between
these options is within the debtors’ discretion—not the
bankruptcy court’s—the remand contemplates only
ministerial action. We therefore find that the district
court’s order was effectively a final order and therefore
appropriate for appellate review. See, e.g., In re Cortez, 

, 452-53 (5th Cir. 2006) (where the bankruptcy
court denied the UST’s motion to dismiss under section
707(b) but the district court reversed the dismissal, the
remand left only ministerial tasks to be completed and
therefore constituted a final appealable order).


  2. Untimeliness
  The second jurisdictional issue is whether the UST’s
untimely raising of the section 707(b)(2) grounds for
dismissal deprives this court of jurisdiction. Section
704(b)(2), as mentioned above, sets a deadline for filing
motions to dismiss chapter 7 cases for presumed abuse
under section 707(b)(2). See 11 U.S.C. § 704(b)(2). In this
case, the UST timely filed its initial motion to dismiss on
10                                               No. 07-2503

October 30, 2006. The October 30 motion argued that the
case should be dismissed because of the totality of the
debtor’s circumstances. The UST did not raise the section
707(b)(2) claim for presumed abuse until it supplemented
its dismissal motion on November 2. The November 2
supplement referenced Fed. R. Civ. P. 15, which allows an
amendment as a matter of course before a responsive
pleading is filed, and allows such an amendment to relate
back to the date of the original filing in certain circum-
stances. But, as the UST now concedes in briefing, Rule 15
did not apply to its motion to dismiss and was thus
improperly invoked. See Fed. R. Bankr. P. 9014 (governing
contested matters in bankruptcy but not incorporating Fed.
R. Bankr. P. 7015, the Rule 15 analog in bankruptcy pro-
ceedings). The debtors did not object to the tardy supple-
ment, nor did they raise the untimeliness issue in the
district court or in their opening brief before this court.
  The question for us is whether the deadline for UST
motions to dismiss provided in section 704(b)(2) is juris-
dictional in nature. There are two possibilities: (a) that the
time limit for UST motions to dismiss is jurisdictional, such
that untimeliness of the UST’s section 707(b)(2) supplement
deprived the bankruptcy court of jurisdiction to enter-
tain those grounds for dismissal; or (b) that the time
limit is not jurisdictional and the debtors waived their
objection to the UST’s late filing by failing to object. The
UST claims that any objection to its untimely filing has
been waived because section 704(b)(2)’s deadline for
UST motions to dismiss is not jurisdictional. Statutory
limits, it claims, are only jurisdictional when Congress
“clearly states” that they are jurisdictional. The debtors
No. 07-2503                                                11

argue for the first time in their Reply Brief that “[i]f the
motion under sec. 707(b)(2) were untimely, it resolves the
appeal” because “[t]he lack of a timely objection should
deprive the court of jurisdiction to entertain the motion
to dismiss on that basis.”
   In Bowles v. Russell, ___ U.S. ___, 

(2007),
the Supreme Court held that the appellate filing deadline
set by Fed. R. App. P. 4(a)(1)(A) and 28 U.S.C. § 2107(a)
was jurisdictional in nature. The Court distinguished
its holding in Bowles from that in Kontrick v. Ryan, 

, 458-59 (2004), where the Court had held that Federal
Rule of Bankruptcy Procedure 4004—which set deadlines
for objections to a debtor’s discharge—was not jurisdic-
tional. In contrasting its holdings in Bowles and Kontrick,
the Court emphasized that the non-statutory nature of
the time limit in Kontrick was essential to the analysis in
that case. See 

. Justice Thomas
noted that “those decisions [which have undertaken to
clarify the distinction between jurisdictional and non-
jurisdictional rules] have . . . recognized the jurisdictional
significance of the fact that a time limit is set forth in a
statute.” 

made sense, the Court rea-
soned, because “Congress decides whether federal courts
can hear cases at all, [and thus] it can also determine when,
and under what conditions, federal courts can hear them.”

   Bowles suggests that where a filing deadline is set by
statute, the time limit in question could be jurisdictional.
See 

. However, we do not
believe that the Supreme Court intended Bowles to apply
12                                                  No. 07-2503

to every statutory deadline, especially in light of the
fact that such an interpretation would overturn huge
swaths of established case law. See Jason Binford, Deadline
Hard Line: Bowles v. Russell and the Special Significance of
Statutory Deadlines, 26-8 Am. Bankr. Inst. J. 22, 73 (2007).
For example, most statutes of limitations are contained
in statutes, but it is generally understood that a party can
waive a statute of limitations defense by failing to raise it.
The Supreme Court confirmed this point in John R. Sand &
Gravel Co. v. United States, 

(2008). In that case,
the Court stated that most limitations periods are
non-jurisdictional affirmative defenses and are subject
to waiver, forfeiture, and equitable tolling. 

(citing,
inter alia, Rotella v. Wood, 

, 560 (2000) (“federal
statutes of limitations are generally subject to equitable
principles of tolling”)). Specifically, the Court distin-
guished between the majority of statutes of limitations
that “seek primarily to protect defendants against stale
or unduly delayed claims,” which are non-jurisdictional
and subject to waiver, see 

alia, United States
v. Kubrick, 

, 117 (1979)), and statutes of limita-
tions that seek to “achieve a broader system-related goal”
such as “promoting judicial efficiency,” which are “more
absolute” and have been referred to as “jurisdictional,” see

alia, 

).
  Thus, although Bowles implies that all statutory time
limits may have jurisdictional significance, the Supreme
Court’s later discussion of statutes of limitations in John R.
Sand & Gravel Co. appears to soften Bowles’s implications,
at least for run-of-the-mill statutes of limitations and
statutory time limits like the one at issue here. In this case,
No. 07-2503                                                    13

although the section 704(b)(2) deadline for UST motions to
dismiss has the salutary effect of promoting judicial
efficiency, we believe that its primary purpose is to
protect possibly cash-strapped debtors from needlessly
protracted or delayed bankruptcy proceedings. Because
section 704(b)(2)’s main purpose is to protect debtors, we
believe that its protections, like those of the vast majority
of statutory time limits, can be waived by the debtors
as well.3 See John R. Sand & Gravel 

.
Because we hold that the section 704(b) deadline is not
jurisdictional, the debtors have waived any objection to the
UST’s tardy supplemental filing raising the section
707(b)(2) grounds for dismissal. We thus proceed to the
merits of this appeal.




3
   We note that our sister circuits have also not interpreted
Bowles as transforming all federal statutory time limits into
jurisdictional bars. For example, in interpreting the deadlines
contained in the Anti-Terrorism and Effective Death Penalty
Act (“AEDPA”)—which would seem to be more directed at
promoting judicial efficiency and less at protecting litigants
than the deadline here—circuit courts have consistently held
that Bowles did not transform the relevant statutory time limits
into jurisdictional bars. See, e.g., Coker v. Quarterman, 270 Fed.
Appx. 305, 

, *5 n.1 (5th Cir. 2008) (expressly
holding that equitable tolling of AEDPA’s statute of limita-
tions survives Bowles); Diaz v. Kelly, 

, 153 (2d Cir.
2008) (same).
14                                                 No. 07-2503

C. Vehicle Ownership Deduction Under BAPCPA
  The only issue on the merits in this case is whether, in
conducting their means test under section 707(b), the
debtors may claim a vehicle ownership expense for a
vehicle that is not encumbered by a debt or lease. We
review this issue of statutory interpretation de novo. See
U.S. v. Thornton, 

, 745 (7th Cir. 2008); see also In
re Kimbro, 

, 520 (6th Cir. BAP 2008).
 As noted above, the chapter 7 means test defines
“monthly expenses” as follows:
     The debtor’s monthly expenses shall be the debtor’s
     applicable monthly expense amounts specified under
     the National Standards and Local Standards, and the
     debtor’s actual monthly expenses for the categories
     specified as Other Necessary Expenses issued by the
     Internal Revenue Service for the area in which the
     debtor resides. . . . Notwithstanding any other provi-
     sion of this clause, the monthly expenses of the
     debtor shall not include any payments for debts.
11 U.S.C. § 707(b)(2)(A)(ii)(I). The National and Local
Standards referenced in the statute are found in the IRS’s
Financial Analysis Handbook which is, in turn, con-
tained in the IRS’s Internal Revenue Manual (“IRM”).4
Revenue agents use the IRM to assess the financial condi-
tion of delinquent taxpayers in order to determine how
much they can afford to pay back to the government. The


4
  The IRM, including the Financial Analysis Handbook, can
be found on the IRS website, at http://www.irs.gov/irm.
No. 07-2503                                                     15

IRM specifies three types of expenses: National Standards,
Local Standards, and Other Expenses. See IRM § 5.15.1.7.
The IRM’s Local Standards set out two categories of
expenses: transportation and housing/utilities. There are
two components of the transportation standard: a nation-
wide allowance for ownership costs and an allowance to
cover the cost of operating one or two motor vehicles or
the cost of public transportation. See IRM § 5.15.1.
  In this case, the district court concluded that the debtors
could not take the vehicle ownership deduction because
they had no monthly car payment and so had no “applica-
ble monthly expenses.” The debtors argue that the
district court erred in its interpretation because the statute
specifically differentiates between “applicable” monthly
expenses (which include the transportation ownership
deduction) and “actual” monthly expenses. Under the
debtors’ reading, “applicable” expenses are those that
apply to the debtors by virtue of their geographic region
and number of cars, regardless of whether the debtor
has an actual loan or lease payment.
  This issue has been heavily litigated, and there is a
close split among courts that have addressed it. See In re
Ransom, 

, 803-06 (9th Cir. BAP 2007) (describing
the split in authority)5 ; see also In re Ragle, 

, 392


5
  Ransom and several other cases used in our analysis deal with
confirmation of a plan under chapter 13. These cases are
instructive in chapter 7 cases because chapter 13 uses the
means test of section 707(b)(2)(A)(ii)(I) to determine the debtor’s
                                                     (continued...)
16                                                    No. 07-2503

(E.D. Kent. 2008) (same). We note that of the four bank-
ruptcy appellate panels that have addressed this ques-
tion, two have concluded that a debtor who owns his
car outright may take the deduction, see In re Kimbro, 

, 532 (6th Cir. BAP 2008), In re Pearson, 

,
714 (10th Cir. BAP 2008), and two have concluded the
opposite, see In re Ransom, 

, 808 (9th Cir. BAP
2007), In re Wilson, 

, 734 (8th Cir. BAP 2008). The
Seventh Circuit is the first circuit court to consider
this issue.
  In determining whether a debtor is entitled to take the
ownership deduction, courts have generally taken two
approaches. These approaches have generally been called
the “IRM approach” and the “plain language” approach.6
As explained below, we believe that the plain language
approach—which allows the vehicle ownership deduc-
tion even where the debtors have no monthly car
payment—is the better interpretation.



5
  (...continued)
projected disposable income. See In re Sawicki, No. 2-07-BK-
3493-CGC, 

(Bankr. D. Ariz. Feb. 12, 2008).
6
  Because most courts have referred to the two sides of this
debate in this manner, we use these labels for ease of analysis and
recognition. However, courts which have differed from
our present ruling should not be viewed as rejecting the
“plain language” of the statute. Although we do not adopt it, the
IRM view is supported by many thoughtful decisions, all of
which believed that it was the proper interpretation of the statute.
See 

(Thurman, B.J., concurring).
No. 07-2503                                                 17

  1. Statutory Language
  To analyze this issue, we begin with the language of the
statute. When the language is plain, the sole function of
the courts is to enforce the statute according to its terms.
See Lamie v. United States Trustee, 

, 534 (2004).
The problem here is that courts are sharply divided on
the proper interpretation of the statute. Courts following
the IRM approach reason that the ownership deduction
should not be taken if the debtor has no car payment
because the word “applicable” means that the deduction
may only be taken if the deduction is “relevant,” that is, if
the debtor has such an expense. See, e.g. 

. Courts adopting this approach believe that this
reading gives “applicable” its customary meaning of
“capable of being applied; having relevance” and thereby
sufficiently distinguishes the term “applicable monthly
expense amounts” from the term “actual monthly expenses
in the statute.” See, e.g., 

(citing
MERRIAM-WEBSTER’S COLLEGIATE DICTIONARY 60
(11th ed. 2005)). Thus, under the IRM approach, if the
debtor has no debt or lease payment on his vehicle, he
cannot take the ownership deduction because it is not
applicable to him.
  However, courts in the plain language camp argue that
“applicable” refers to the selection of an expense
amount corresponding to the appropriate geographic
region and number of vehicles owned by the debtor. See,
e.g., In re Grunert, 

, 592 (Bankr. E.D. Wis. 2007);
In re McIvor, No. 06-42566, 

, *4 (Bankr.
E.D. Mich. Nov. 15, 2006) (“the word ‘applicable,’ in the
18                                              No. 07-2503

context of 707(b)(2)(A)(ii)(I) means the applicable Local
Standards as it pertains to the area in which the debtor
resides”); In re Smith, No. 06-30261, 

, *8
(Bankr. N.D. Ohio June 22, 2007) (“If the debtor has only
one car, the ‘applicable’ expense is the one found in the
first column [of the Standard for Ownership Costs], and
if a debtor has a second vehicle, the amount in the
second column is also ‘applicable.’ ”). In other words,
under the plain language approach, the Local Standard
vehicle ownership deduction “applies” to the debtor by
virtue of his geographic region and number of cars,
regardless of whether that deduction is an actual expenses.
  We are persuaded that the plain language view of
section 707(b)(2)(A)(ii)(I) is more strongly supported by the
language and logic of the statute. In order to give effect to
all the words of the statute, the term “applicable
monthly expense amounts” cannot mean the same thing
as “actual monthly expenses.” Under the statute, a
debtor’s “actual monthly expenses” are only relevant with
regard to the IRS’s “Other Necessary Expenses;” they are
not relevant to deductions taken under the Local Stan-
dards, including the transportation ownership deduction.
Since “applicable” cannot be synonymous with “actual,”
applicable cannot reference what the debtor’s actual
expense is for a category, as courts favoring the IRM
approach would interpret the word. We conclude that
the better interpretation of “applicable” is that it refer-
ences the selection of the debtor’s geographic region
and number of cars.
 We also take note of two additional points in connection
with the statutory language. First, as the Sixth Circuit
No. 07-2503                                              19

BAP pointed out in Kimbro, section 707(b)(2)(A)(ii)(I) addi-
tionally states that “[n]otwithstanding any other pro-
vision of this clause, the monthly expenses of the debtor
shall not include any payments for debts.” It is difficult
to square this part of section 707(b)(2)(A)(ii)(I) with the
IRM approach, which would only allow the vehicle owner-
ship deduction on condition of a monthly debt payment.
See 

(“This provision alone estab-
lishes beyond doubt that Congress intended to allow an
ownership expense even when a debtor has no debt
payment on a vehicle.”). Second, when we examine the
means test more broadly, we find that Congress has been
fairly specific in describing the circumstances under
which deductions are to be taken. For example,
section 707(b)(2)(A)(ii) uses the following phrases to
describe the nature of various other deductions: “debtor’s
reasonably necessary expenses incurred,”
§ 707(b)(2)(A)(ii)(I) (Family Violence Prevention and
Services Act expenses); “expenses paid by the debtor that
are reasonable and necessary,” § 707(b)(2)(A)(ii)(II) (ex-
penses for elderly, chronically ill or disabled immediate
family members); “reasonable and necessary [expenses],”
§ 707(b)(2)(A)(ii)(I) (additional allowances for food and
clothing up to 5%); and “actual expenses [that are] are
reasonable and necessary,” § 707(b)(2)(A)(ii)(V) (additional
home energy costs). The language of these provisions
shows that when Congress intended to condition a deduc-
tion on a debtor’s actual expenditure or showing of need,
it did so. The absence of this type of language with regard
to the Local Standards—again, the statute only refers to the
“debtor’s applicable monthly expense amounts specified
20                                              No. 07-2503

under the National Standards and Local Stan-
dards”—suggests that courts should not require more of
the debtor than to show that the “amount specified” under
the Local Standard be applicable by virtue of the debtor’s
geography and number of vehicles.


  2. Incorporation of IRM Analysis
  The IRM approach is characterized as such because
courts following it use the methodology of the IRM as an
interpretive guide for the means test. Decisions favoring
the IRM view generally reason that we should look not
only to the Local Standards themselves (which are
simply dollar amounts) in conducting a debtor’s means
test, but also to the manner in which the IRM uses the
Local Standards in the revenue collection process. See, e.g.,

.
  IRS agents use the Local Standards as caps on what a
delinquent taxpayer may claim as living expenses when
calculating what the taxpayer can pay back to the gov-
ernment. See IRM § 5.15.1.7 (stating, regarding the local
standards, that “[t]axpayers will be allowed the local
standard or the amount actually paid, whichever is less”)
(emphasis in original). Under IRS methodology, if a
taxpayer has no car payment, the taxpayer is entitled only
to the transportation operation deduction, not the owner-
ship deduction. See 

taxpayer has a car, but no car
payment [sic] only the operating cost portion of the
transportation standard is used to figure the allowable
transportation expense.”). As the Ninth Circuit BAP
explained in Ransom: because the IRS Manual “prohibits
No. 07-2503                                                 21

the debtor from asserting the vehicle ownership expense
deduction when he or she has no loan or lease payments
on a vehicle, [courts taking the IRM approach] reason
that § 707(b)(2)(A)(ii)(I) does not allow such a deduction
either.” 

.
  However, while the IRM provides a useful methodology
to IRS agents for determining a taxpayer’s ability to pay the
IRS, we agree with other plain language courts that there
is no indication that Congress intended that methodol-
ogy to be used in conducting the means test. As an initial
matter, section 707(b)(2)(A)(ii)(I) makes reference only to
the “amounts specified” in the Local Standards; the statute
does not incorporate the IRM or the Financial Analysis
Handbook, or even refer to them. See 11 U.S.C.
§ 707(b)(2)(A)(ii)(I) (making no reference to the IRM, the
Financial Analysis Handbook or their methodologies).
The legislative history of section 707(b)(2)(A)(ii)(I) confirms
that the provision’s silence with regard to the IRM and
IRS methodology was deliberate. A prior version of a bill
can be useful in interpreting a bill that was subsequently
enacted. See, e.g., In re Lifschultz Fast Freight Corp., 

, 631 (7th Cir. 1995) (the fact that the final enacted
version of a bill omitted a provision contained in earlier
unpassed versions of the bill evidenced a “significant
and clearly deliberate” choice by Congress). A prior
version of the BAPCPA which was never passed defined
“projected monthly net income” under the means test to
require a calculation of expenses as follows:
    (A) the expense allowances under the applicable
    National Standards, Local Standards, and Other
22                                               No. 07-2503

     Necessary Expenses allowance (excluding payments
     for debts) for the debtor . . . in the area in which the
     debtor resides as determined under the Internal Revenue
     Service financial analysis for expenses in effect as of
     the date of the order for relief.
H.R. 3150, 105th Congress (1998) (emphasis added). The
phrase “as determined under the Internal Revenue Service
financial analysis” was later removed and replaced by
the current language, which states that the debtor
should deduct the “applicable monthly expense amounts
specified under the National and Local Standards.” 11
U.S.C. § 707(b)(2)(A)(ii)(I). This change indicates Con-
gress’s intent that courts not be bound by the financial
analysis contained in the IRM and supports the conclu-
sion that courts should look only to the numeric
amounts set forth in the Local Standards. See 

; In re Fowler, 

, 419 (Bankr. D. Del.
2006). Because the statute incorporates only the “amounts”
of the Local Standards and does not incorporate IRM
procedures or methodology, and because the legislative
history of the statute indicates that Congress inten-
tionally omitted any reference to IRM financial analysis,
we believe that using IRM methodology in conducting
the means test is misguided. See In re Simms, No. 06-1206,

, *18 (Bankr. N.D.W.V. Jan. 23, 2008) (“No
basis exists for the court to allow the National or Local
Standards to be spliced based on what an IRS field agent
would do when dealing with a delinquent taxpayer.”).
  In addition to the fact that neither the statutory text
nor history support using IRM methods in the means test,
No. 07-2503                                             23

there are also practical reasons why it is inappropriate
to look to the IRM, namely that the substantial discretion
allowed to a revenue officer under the IRM is inconsistent
with the purpose of the means test to adopt a uniform,
bright-line test that eliminates judicial discretion. As
explained in Kimbro:
   Congress intended that there be uniform and readily-
   applied formula for determining when the bankruptcy
   court should presume that a debtor’s chapter 7 petition
   is an abuse and for determining an above-median
   debtor’s disposable income in chapter 13. By explicitly
   referring to the National and Local Standards, Con-
   gress incorporated a table of standard expenses that
   could be easily and uniformly applied; Congress
   intended that the court and parties simply utilize the
   expense amount from the applicable column based on
   the debtor’s income, family size, number of cars and
   locale. The amounts are entered into the means test
   form and a determination of disposable income is
    accomplished without judicial discretion. The clear
   policies behind the means test were the uniform
   application of a bright-line test that eliminates
   judicial discretion. Plainly, Congress determined that
   these policies were more important than accuracy.
   However, if the IRM were used to determine the
   amounts of expenses . . . the means test would of
   necessity again be a highly discretionary test, because
   under the IRM, a revenue officer is afforded significant
   discretion in determining a taxpayer’s ability to pay
   a tax debt.
24                                              No. 07-2503

. If courts were to interpret
section 707(b)(2)(A)(ii)(I) as incorporating the highly
discretionary procedures revenue officers use under the
IRM, the means test would be similar to the disposable
income determination used before BAPCPA, when bank-
ruptcy judges had a great deal of discretion in deter-
mining a debtor’s net disposable income. See 

It
was clearly Congress’s intent to eliminate such discretion
when it enacted BAPCPA. See In re Spraggins, 

,
223-25 (Bankr. E.D. Wis. 2008) (stating that it was “Con-
gressional intent to employ a bright-line test for dis-
posable income by removing bankruptcy court ‘value
judgments’ concerning the debtor’s lifestyle”); In re Pearl,

, 314 (Bankr. N.D.N.Y. 2008) (Congress’s intent
was to was to “eliminate the discretion of the courts in
determining what expenses are reasonable”). We thus are
further convinced that it is inappropriate to look to the
IRM for guidance in applying the means test.
  In sum, because we believe that reference to IRM meth-
odology is inconsistent with the statutory language,
history, and purpose, we do not turn to it in interpreting
the means test.


  3. Policy
  We also believe that policy considerations support
allowing the ownership deduction to debtors who own
their cars outright. It is common sense that there are costs
associated with vehicle ownership apart from loan or
lease payments. (And of course, in some sense, debt
payments are not really “ownership costs” at all.) These
No. 07-2503                                                25

non-debt costs include depreciation, insurance, licensing
fees and taxes. See 

(reasoning
that “every vehicle owner incurs ownership expenses,
and that is so regardless of debt or lease payments”). We
see no reason why these expenditures are not contem-
plated by the ownership deduction. It is true that
non-debt ownership expenses may be sporadic or—aside
from replacement costs—substantially less than the
ownership deduction amounts (which in this case are
$471 for the first car and $332 for the second car). However,
monthly car payments can be comparatively small as
well. See, e.g., In re Clark, No. 07-23390, 

, *6
(Bankr. E.D. Wis. Feb. 14, 2008) (noting, in considering
this issue, that one of the debtor’s car payments was only
$79.17). The Clark court posited a possible explanation: it
reasoned that “Congress must have had a reason for
allowing the ownership deduction in calculating the
means test formula for debtors with modest [car] pay-
ments, perhaps as some courts have posited, because
the debtors may need replacement transportation during
the course of [bankruptcy proceedings].” Debtors who
own their cars outright would have the same potential
need for vehicle replacement, so we believe that they are
similarly entitled to the deduction even though the deduc-
tion amount may exceed their actual costs. See id.; see also
Eugene Wedoff, Means Testing in the New 707(b), 79 Am.
Bankr. L.J. 231, 257 (2005) (recognizing that allowing the
ownership deduction to debtors who own their cars
outright “reflects the reality that a car for which the
debtor no longer makes payments may soon need to be
replaced (so that the debtor will have actual ownership
expenses) . . . .”).
26                                            No. 07-2503

   Limiting the deduction to debtors who make car pay-
ments would also produce arbitrary and unfair results. The
debtor who completes his last car payment just before
filing would not be allowed the deduction, while the
debtor who has one car payment remaining a few days
after filing would be allowed to take it. As Bankruptcy
Judge Eugene Wedoff commented in his article exploring
the BAPCPA means test: Allowing the ownership deduc-
tion to debtors who own their vehicles outright “avoids
arbitrary distinctions between debtors who have only a
few car payments left at the time of their bankruptcy
filing and those who finished making their car pay-
ments just before the filing.” Wedoff, 79 Am. Bankr. L.J.
at 258. We also think it unfair to “punish” debtors who
choose to drive older or cheaper vehicles that they own
rather than borrow money to obtain newer or more ex-
pensive cars, especially in light of the fact that one of
BAPCPA’s purposes was to make it more difficult to
discharge consumer debts.
  Finally, we acknowledge that courts following the IRM
approach believe that our reading is inconsistent with one
of the main purposes of BAPCPA: that “creditors [] be
repaid when possible.” See, e.g., 

;
In re Howell, 

, 157 (Bankr. D. Kan. 2007)
(“[D]enying debtors the ownership allowance when they
have no ownership expense (i.e. loan or lease payments) is
entirely consistent with one of the apparent objectives
of BAPCPA: to ensure that debtors actually pay what they
are capable of paying to unsecured creditors.”). While
we agree that the repayment of creditors is among the
purposes of BAPCPA, our concern on this front is lessened
No. 07-2503                                                27

considerably because our decision to allow the ownership
deduction to a debtor who owns his car outright does not
necessarily mean that the debtor’s case will not be dis-
missed. See 

(citing In re Zaporski, 

, 768 (Bankr. E.D. Mich. 2007)). Permitting a
debtor to take the deduction—even where that deduc-
tion puts the debtor’s current monthly income below the
presumptive abuse threshold—does not insulate his
case from dismissal. Instead, it simply means that the
debtor’s petition is not presumed abusive. See 

. The UST can still request dismissal, as he has
done in this case, under section 707(b)(3), either for bad
faith or based on the totality of circumstances (which can
take into consideration a debtor’s actual income and
expenses). See 

.


                      III. Conclusion
  For the reasons explained above, we hold that a debtor
who owns his car free and clear may take the Local Stan-
dard transportation ownership deduction under the
section 707(b)(2)(A)(ii)(I) means test. Accordingly, we
REVERSE the district court and REMAND for further proceed-
ings. We instruct the district court to consider the alterna-
tive argument briefed below by the UST, that the totality of
the circumstances of the debtors’ financial situation
demonstrate abuse under section 707(b)(3)(B).



                           12-17-08