Tax


1. Cal. Rev. & Tax Code §6051
2. Cal. Rev. & Tax Code §18590
3. Cal. Rev & Tax Code § 6829
4. Ch 11
5. Ch 7
6. Ch 13
7. ERISA Pension
8. Excise Tax
9. §362(b)(4)
10. §362(h)
11. §503(10)(1)(B)(I)
12. §505
13. §506
14. §507(a)(7)
15. §523(a)(1)
16. §523(a)(7)
17. §724(b)
18. §4971(a) of the IRC
19. Trustee
20. Trust Fund
21. 26 U.S.C. §6321
22. 26 U.S.C. §7421(a)
23. Misc

1. Cal. Rev. & Tax Code §6051


In re Raiman, 172 B.R. 933 (9th Cir. B.A.P. 1994)
    Tax claims against debtor not dischargeable when claims based on California code section taxing gross receipts of retailer even though some exclusions listed in code.   Rev & Tax § 6051 is a
(a)(7) tax

2. Cal. Rev. & Tax Code § 6829

In re Leal, 366 B.R. 77 (9th Cir. BAP 2007)
    General partners are jointly and severally liable for nonpayment of sales taxes.

3. Cal. Rev. & Tax Code §18590


In re Bracey, 77 F.3d 294 (9th Cir. 1996)
    When taxes are assessed under Cal. Rev. & Tax Code § 18590 et seq.; how the 60-day time limit for protest must be read

4. Ch 11

In re Artisan Woodworkers, 204 F.3d 888 (9th Cir. 2000)
    Postpetition preconfirmation interest and penalties on nondischargeable tax were not discharged following payment in full of prepetition debt and postconfirmation interest pursuant to confirmed Ch 11 plan.

United States v. Energy Resources Co., Inc., 495 U.S. 545 (U.S.R.I. 1990)
    Bankruptcy court may order IRS to treat Ch. 11 tax payments by debtor corporation as trust fund payments if necessary for reorganization plan

In re Stanmock, Inc., 103 B.R. 228 (9th Cir. B.A.P. 1989)
    Can’t confirm Chapter 11 plan which allows debtor to designate how IRS will allocate payments

In re Condel, Inc., 91 B.R. 79 (9th Cir. B.A.P. 1988)
    1. IRS may not be enjoined from collecting taxes from officers or directors via Chapter 11 plan.
    2.  IRS may apply tax payments as they see fit, since payments are not deemed “voluntary”

5. Ch 7

In re Feiler, 218 F.3d 948 (9th Cir. 2000)
    Chapter 7 trustee may recover tax refunds from United States after avoiding debtors’ prepetition election to carry forward net operating loss.

6. Ch 13

In re Fowler, 394 F.3d 1208 (9th Cir. 2005)
    “We hold that § 348(d) requires that postpetition employment tax debt, incurred as an administrative expense of a Chapter 11 bankruptcy estate, retains its first priority administrative expense status upon conversion to a Chapter 13 bankruptcy plan.  Section 1305 is not in conflict with this holding because it does not govern the priority of the postpetition claims it allows into the bankruptcy.”

In re Bisch, 159 B.R. 546 (9th Cir. B.A.P. 1993)
    A federal tax lien which was not included as a part of the IRS proof of claim and not provided for in the Chapter 13 remains valid despite confirmation of the plan   

In re Tomlan, 907 F.2d 114 (9th Cir. 18990)
    IRS must file a proof of claim to obtain priority status in Chapter 13

7. ERISA Pension

In re Snyder, 343 F.3d 1171 (9th Cir. 2003)
    Debtor’s interest in a pension plan was not property of the estate, and thus it could not be used to secure the IRS’s claim for delinquent taxes in his chapter 13 case.  This is so, even though the IRS is not subject to ERISA’s antialienation provisions.

In re McIntyre, 222 F.3d 655 (9th Cir. 2000)
    The IRS may levy upon ERISA-regulated pension benefits to satisfy a husband's tax debt against the claim that the wife has a vested interest in half of those benefits under California community property laws.

In re Connor, 27 F.3d 365 (9th Cir. 1994)
    Fed tax lien enforceable against a bankruptcy debtor’s future pension payments where the debtor’s unqualified right to receive the payments mature before he filed for bankruptcy

In re Anderson, 149 B.R. 591 (9th Cir. B.A.P. 1992)
    A debtor’s interest in an ERISA pension plan is property or a right to property to which an IRS tax lien could attach pursuant to 26 U.S.C. § 6321

8. Excise Tax

In re George, 361 F.3d 1157 (9th Cir. 2004)
    Claim by California Uninsured Employers Fund against employer who failed to purchase workers’ compensation insurance was not “excise tax” for purposes pf bankruptcy law.

9. §362(b)(4)

In re Universal Life Church, Inc., 128 F.3d 1294 (9th Cir.  1997), cert. denied, 524 U.S. 952 (1998)
    IRS’s revocation of tax exempt status was within 362(b)(4)

10. §362(h)

In re Pinkstaff, 974 F.2d 113 (9th Cir. 1992)
    IRS subject to 362(h)

11. §503(10)(1)(B)(I)


In re Pacific-Atlantic Trading Co., 64 F.3d 1292 (9th Cir. 1995)
    When is a tax “incurred by the estate”.  When does § 503(10)(1)(B)(I) apply
Application of § 507(a)(7)(A)(iii)

12. §505


Central Valley AG Enterprises v. U.S., 532 F.3d 750, 764 (9th Cir. 2008)
    Notwithstanding the finality provisions of the Tax Equity and Fiscal Responsibility Act of 1982, “Section 505 provides for bankruptcy jurisdiction to redetermine a debtor’s tax liabilities notwithstanding the preclusive effects to which a tax judgment might otherwise be entitled.”

American Principals Leasing Corp. v. U.S., 904 F.2d 477 (9th Cir. 1990)
    Bankruptcy court does not have jurisdiction to determine nondebtors tax under § 505

13. §506

In re Pletz, 221 F.3d 1114 (9th Cir. 2000)
    Under Oregon law, chapter 13 debtor's interest in property held by debtor and nondebtor spouse as tenants by the entirety had to be valued under § 506  to reflect concurrent interests of both spouses.

14. §507(a)(7)

In re Gurney, 192 B.R. 529 (9th Cir. B.A.P. 1996)
    Equitable tolling extended § 507(a)(7) priority period for Arizona state taxes

15. §523(a)(1)


In re King, 122 B.R. 383 (9th Cir. B.A.P. 1991), aff’d. 961 F.2d 1423 (9th Cir. 1992)
    Cal. Law: taxes are assessed for purposes of 523(a)(1) when they are final, i.e., 60 days after notice of proposed additional tax (when a notice of proposed deficiency assessment becomes final)

16. §523(a)(7)


McKay v. U.S., 957 F.2d 689 (9th Cir. 1992)
    Tax penalties incurred more than 3 years prior to filing of petition are discharged under 523(a)(7)

17. §724(b)

In re Markair, Inc. (I), 308 F.3d 1038 (9th Cir. 2002), cert. denied, Barstow v. I.R.S., 539 U.S. 926 (2003)
    “[T]he term “tax lien” in § 724(b) means a statutory tax lien and ...does not embrace a judicial lien securing an underlying tax obligation.”

In re Markair, Inc. (II), 308 F.3d 1057 (9th Cir. 2002)
    “We hold that, under § 724(b), priority unsecured creditors have a right to obtain only that portion of the proceeds equaling the amount of the tax liens; any remaining proceeds go first to the junior lien claimants, then to the holders of the tax liens insofar as their claims were not already satisfied and, finally, to the estate.”

18. §4971(a) of the IRC


United States v. Reorganized CF&I Fabricators of Utah, Inc., 518 U.S. 213, 116 S.Ct. 2106 (1996)
    Exaction imposed by § 4971(a) of the IRC on the amount of an accumulated funding deficiency of a pension plan is “not entitled to seventh priority as an ‘excise tax’ under § 507(a)(7)(E), but instead, is, for bankruptcy purposes, a penalty to be dealt with as an ordinary, unsecured claim.”

19. Trustee

Raleigh v. Illinois Dept. of Revenue, 530 U.S. 15, 120 S.Ct. 1951 (2000)
    When the substantive law creating a tax obligation puts the burden of proof on a taxpayer, the burden of proof on the tax claim in bankruptcy court remains where the substantive law put it (in this case, on the trustee in bankruptcy).

In re Bakersfield Westar, Inc., 226 B.R. 227 (9th Cir. B.A.P. 1998)
    Small Business trustee may avoid shareholders’ Subchapter S revocation as fraudulent transfer of property conferring benefit on shareholders at expense of company’s creditors.

U.S. v. Hemmen, 51 F.3d 883 (9th Cir. 1995)
    Trustee liable on tax levy, even though it was made before court actually fixed the amount of administrative expense payment to be paid to debtor’s principal.  362 inapplicable

Holywell Corp. v. Smith, 503 U.S. 47, 112 S.Ct. 1021 (1992)
    Trustee must file taxes for debtors

20. Trust Fund

In re Hamilton Taft & Co., 53 F.3d 285 (9th Cir. 1995), Vacated, 68 F.3d 337 (9th Cir. 1995)
    Trust Fund.  Money transferred to third party not subject to statutory trust.

In re Deer Park, Inc., 136 B.R. 815  (9th Cir. B.A.P. 1992), aff’d. 10 F.3d 1478 (9th Cir. 1993)
    Bankruptcy court had power to order IRS to allocate tax payments to offset trust fund tax liabilities

In re GLK, Inc, 921 F.2d 967 (9th Cir. 1990), cert. denied, 501 U.S. 1205 (1991)
    In light of U.S. v. Energy Resources Co.,, 110 S.Ct 2139 (1990), bankruptcy courts could order debtors’ IRS payments allocated to offset trust-fund tax liability but need not do so where such allocation is not necessary to reorganization

In re Major Dynamics, Inc., 897 F.2d 433 (9th Cir. 1990)
    Post-petition tax withholding funds subject to bankruptcy code’s priorities and do not create IRS trust fund

21. 26 U.S.C. §6321


U.S. v. Barbier, 896 F.2d 377 (9th Cir. 1990)
    26 U.S.C. § 6321 allows tax liens to attach to all property, even debtors’ personal property, even debtors’ personal property exempt from levy under 26 U.S.C. § 6334.

22. 26 U.S.C. §7421(a)

U.S. v. Barbier, 896 F.2d 377 (9th Cir. 1990)
    26 U.S.C. § 6321 allows tax liens to attach to all property, even debtors’ personal property, even debtors’ personal property exempt from levy under 26 U.S.C. § 6334.

23. Misc

In re KRSM Properties, LLC, 318 B.R. 712 (9th Cir. BAP 2004)
    Limited liability corporation’s assets could not be used to pay LLC members’ personal tax liability, where members elect to have the LLC disregarded as a separate entity.

In re Olshan, 356 F.3d 1078 (9th Cir. 2004)
    Presumption of correctness of assessment applies to all items assessed, except where there is a pattern of arbitrariness or carelessness.  Although taxpayer rebutted in part presumption of correctness as to unreported business income, IRS still had right to present evidence establishing existence of unreported income.

In re Bunyan, 354 F.3d 1149 (9th Cir. 2004)
    Bankruptcy court lacks jurisdiction to consider tax assessments, where they became final upon dismissal of appeals in 1993.

In re Mantz, 343 F.3d 1207 (9th Cir. 2003)
    Bankruptcy court had subject matter jurisdiction to determine debtor’s tax liability where there was no final administrative determination of debtor’s tax liability prior to commencement of bankruptcy case.   

In re Montross, 209 B.R. 943 (9th Cir. B.A.P. 1997)
    Partnership that had no knowledge debtor was using partnership account for money laundering was not “transferee” for purpose of avoiding transfers into account

In re Jones, 208 B.R. 935 (9th Cir. B.A.P. 1997)
    Guilty plea to “concealing ability to pay” offers no guidance on whether taxpayer “concealed assets” within meaning of regulation addressing government’s ability to reopen case after acceptance of offer in compromise

In re Belozer Farms, Inc., 199 B.R. 720 (9th Cir. B.A.P. 1996)
    Unpaid assessments levied against chicken processor by Oregon Fryer Commission were not a “tax” subject to priority status

In re Hovan, Inc., 96 F.3d 1254 (9th Cir. 1996)
    State’s claim for unpaid tax penalties not entitled to priority status

In re Los Angeles International Airport Hotel Associates, 196 B.R. 134 (9th Cir. B.A.P. 1996),
aff’d. 106 F.3d 1479 (9th Cir. 1997)
    Hotel’s complimentary beverages and breakfasts constitute sales subject to California sales tax

In re Baker, 74 F.3d 906 (9th Cir. 1996), cert. denied, 517 U.S. 1192 (1996)
    Bankruptcy court may not redetermine debtors’ tax liability as established by stipulated Tax Court decision

In re Caroline Triangle Ltd., Partnership, 166 B.R. 411 (9th Cir. B.A.P. 1994)
    Taxes are not incurred where property abandoned.  Further, they were a lien, not a priority.

In re Smith, 158 B.R. 813 (9th Cir.. B.A.P. 1993)
    Order requiring Washington not to deduct IRS taxes from lottery checks violated anti-injunction provision.  26 U.S.C. 7421

In re Kimura, 969 F.2d 806 (9th Cir. 1992)
    Provision requiring trade creditors to be paid as a condition to transfer of a liquor license is invalid as to a federal tax lien

In re Sluggo’s Chicago Style, Inc., 912 F.2d 1073 (9th Cir. 1990), cert. denied, 498 U.S. 1067 (1991)
    Under California law, a security deposit held by the state taxing authority was property of the estate

In re Isom, 901 F.2d 744 (9th Cir. 1990)
    IRS not required to release tax liens when underlying debt was discharged

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