249
‘‘(1) the reasonable needs of the public for in-
formation about the operational results of the Fed-
eral bankruptcy system; 
‘‘(2) economy, simplicity, and lack of undue 
burden on persons with a duty to file reports; and 
‘‘(3) appropriate privacy concerns and safe-
guards. 
‘‘(d) FINAL REPORTS.—The uniform forms for final 
reports required under subsection (a) for use by trustees 
under chapters 7, 12, and 13 of title 11 shall, in addition 
to such other matters as are required by law or as the 
Attorney General in the discretion of the Attorney General 
shall propose, include with respect to a case under such 
title—
‘‘(1) information about the length of time the 
case was pending; 
‘‘(2) assets abandoned; 
‘‘(3) assets exempted; 
‘‘(4) receipts and disbursements of the estate; 
‘‘(5) expenses of administration, including for 
use under section 707(b), actual costs of admin-
istering cases under chapter 13 of title 11; 
‘‘(6) claims asserted; 
‘‘(7) claims allowed; and
250
‘‘(8) distributions to claimants and claims dis-
charged without payment, 
in each case by appropriate category and, in cases under 
chapters 12 and 13 of title 11, date of confirmation of 
the plan, each modification thereto, and defaults by the 
debtor in performance under the plan. 
‘‘(e) PERIODIC REPORTS.—The uniform forms for 
periodic reports required under subsection (a) for use by 
trustees or debtors in possession under chapter 11 of title 
11 shall, in addition to such other matters as are required 
by law or as the Attorney General in the discretion of the 
Attorney General shall propose, include—
‘‘(1) information about the industry classifica-
tion, published by the Department of Commerce, for 
the businesses conducted by the debtor; 
‘‘(2) length of time the case has been pending; 
‘‘(3) number of full-time employees as of the 
date of the order for relief and at the end of each 
reporting period since the case was filed; 
‘‘(4) cash receipts, cash disbursements and 
profitability of the debtor for the most recent period 
and cumulatively since the date of the order for re-
lief;
251
‘‘(5) compliance with title 11, whether or not 
tax returns and tax payments since the date of the 
order for relief have been timely filed and made; 
‘‘(6) all professional fees approved by the court 
in the case for the most recent period and cumula-
tively since the date of the order for relief (sepa-
rately reported, for the professional fees incurred by 
or on behalf of the debtor, between those that would 
have been incurred absent a bankruptcy case and 
those not); and 
‘‘(7) plans of reorganization filed and confirmed 
and, with respect thereto, by class, the recoveries of 
the holders, expressed in aggregate dollar values 
and, in the case of claims, as a percentage of total 
claims of the class allowed.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for chapter 39 of title 28, United States Code, is amended 
by adding at the end the following:
‘‘589b. Bankruptcy data.’’.
SEC. 603. AUDIT PROCEDURES. 
(a) IN GENERAL.—
(1) ESTABLISHMENT
OF
PROCEDURES.—The 
Attorney General (in judicial districts served by 
United States trustees) and the Judicial Conference 
of the United States (in judicial districts served by 
bankruptcy administrators) shall establish proce-
252
dures to determine the accuracy, veracity, and com-
pleteness of petitions, schedules, and other informa-
tion that the debtor is required to provide under sec-
tions 521 and 1322 of title 11, United States Code, 
and, if applicable, section 111 of such title, in cases 
filed under chapter 7 or 13 of such title in which the 
debtor is an individual. Such audits shall be in ac-
cordance with generally accepted auditing standards 
and performed by independent certified public ac-
countants or independent licensed public account-
ants, provided that the Attorney General and the 
Judicial Conference, as appropriate, may develop al-
ternative auditing standards not later than 2 years 
after the date of enactment of this Act. 
(2) PROCEDURES.—Those procedures required 
by paragraph (1) shall—
(A) establish a method of selecting appro-
priate qualified persons to contract to perform 
those audits; 
(B) establish a method of randomly select-
ing cases to be audited, except that not less 
than 1 out of every 250 cases in each Federal 
judicial district shall be selected for audit; 
(C) require audits of schedules of income 
and expenses that reflect greater than average
253
variances from the statistical norm of the dis-
trict in which the schedules were filed if those 
variances occur by reason of higher income or 
higher expenses than the statistical norm of the 
district in which the schedules were filed; and 
(D) establish procedures for providing, not 
less frequently than annually, public informa-
tion concerning the aggregate results of such 
audits including the percentage of cases, by dis-
trict, in which a material misstatement of in-
come or expenditures is reported. 
(b) AMENDMENTS.—Section 586 of title 28, United 
States Code, is amended—
(1) in subsection (a), by striking paragraph (6) 
and inserting the following: 
‘‘(6) make such reports as the Attorney General 
directs, including the results of audits performed 
under section 603(a) of the Bankruptcy Abuse Pre-
vention and Consumer Protection Act of 2005;’’; and 
(2) by adding at the end the following: 
‘‘(f)(1) The United States trustee for each district is 
authorized to contract with auditors to perform audits in 
cases designated by the United States trustee, in accord-
ance with the procedures established under section 603(a)
254
of the Bankruptcy Abuse Prevention and Consumer Pro-
tection Act of 2005. 
‘‘(2)(A) The report of each audit referred to in para-
graph (1) shall be filed with the court and transmitted 
to the United States trustee. Each report shall clearly and 
conspicuously specify any material misstatement of income 
or expenditures or of assets identified by the person per-
forming the audit. In any case in which a material 
misstatement of income or expenditures or of assets has 
been reported, the clerk of the district court (or the clerk 
of the bankruptcy court if one is certified under section 
156(b) of this title) shall give notice of the misstatement 
to the creditors in the case. 
‘‘(B) If a material misstatement of income or expend-
itures or of assets is reported, the United States trustee 
shall—
‘‘(i) report the material misstatement, if appro-
priate, to the United States Attorney pursuant to 
section 3057 of title 18; and 
‘‘(ii) if advisable, take appropriate action, in-
cluding but not limited to commencing an adversary 
proceeding to revoke the debtor’s discharge pursuant 
to section 727(d) of title 11.’’. 
(c) AMENDMENTS TO SECTION 521 OF TITLE 11, 
U.S.C.—Section 521(a) of title 11, United States Code,
255
as so designated by section 106, is amended in each of 
paragraphs (3) and (4) by inserting ‘‘or an auditor serving 
under section 586(f) of title 28’’ after ‘‘serving in the 
case’’. 
(d) AMENDMENTS TO SECTION 727 OF TITLE 11, 
U.S.C.—Section 727(d) of title 11, United States Code, 
is amended—
(1) in paragraph (2), by striking ‘‘or’’ at the 
end; 
(2) in paragraph (3), by striking the period at 
the end and inserting ‘‘; or’’; and 
(3) by adding at the end the following: 
‘‘(4) the debtor has failed to explain satisfac-
torily—
‘‘(A) a material misstatement in an audit 
referred to in section 586(f) of title 28; or 
‘‘(B) a failure to make available for inspec-
tion all necessary accounts, papers, documents, 
financial records, files, and all other papers, 
things, or property belonging to the debtor that 
are requested for an audit referred to in section 
586(f) of title 28.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall take effect 18 months after the date of 
enactment of this Act.
256
SEC. 604. SENSE OF CONGRESS REGARDING AVAILABILITY 
OF BANKRUPTCY DATA. 
It is the sense of Congress that—
(1) the national policy of the United States 
should be that all data held by bankruptcy clerks in 
electronic form, to the extent such data reflects only 
public records (as defined in section 107 of title 11, 
United States Code), should be released in a usable 
electronic form in bulk to the public, subject to such 
appropriate privacy concerns and safeguards as Con-
gress and the Judicial Conference of the United 
States may determine; and 
(2) there should be established a bankruptcy 
data system in which—
(A) a single set of data definitions and 
forms are used to collect data nationwide; and 
(B) data for any particular bankruptcy 
case are aggregated in the same electronic 
record. 
TITLE VII—BANKRUPTCY TAX 
PROVISIONS 
SEC. 701. TREATMENT OF CERTAIN LIENS. 
(a) TREATMENT OF CERTAIN LIENS.—Section 724 
of title 11, United States Code, is amended—
(1) in subsection (b), in the matter preceding 
paragraph (1), by inserting ‘‘(other than to the ex-
257
tent that there is a properly perfected unavoidable 
tax lien arising in connection with an ad valorem tax 
on real or personal property of the estate)’’ after 
‘‘under this title’’; 
(2) in subsection (b)(2), by inserting ‘‘(except 
that such expenses, other than claims for wages, sal-
aries, or commissions that arise after the date of the 
filing of the petition, shall be limited to expenses in-
curred under chapter 7 of this title and shall not in-
clude expenses incurred under chapter 11 of this 
title)’’ after ‘‘507(a)(1)’’; and 
(3) by adding at the end the following: 
‘‘(e) Before subordinating a tax lien on real or per-
sonal property of the estate, the trustee shall—
‘‘(1) exhaust the unencumbered assets of the 
estate; and 
‘‘(2) in a manner consistent with section 
506(c), recover from property securing an allowed 
secured claim the reasonable, necessary costs and 
expenses of preserving or disposing of such property. 
‘‘(f) Notwithstanding the exclusion of ad valorem tax 
liens under this section and subject to the requirements 
of subsection (e), the following may be paid from property 
of the estate which secures a tax lien, or the proceeds of 
such property:
258
‘‘(1) Claims for wages, salaries, and commis-
sions that are entitled to priority under section 
507(a)(4). 
‘‘(2) Claims for contributions to an employee 
benefit plan entitled to priority under section 
507(a)(5).’’. 
(b) DETERMINATION OF TAX LIABILITY.—Section 
505(a)(2) of title 11, United States Code, is amended— 
(1) in subparagraph (A), by striking ‘‘or’’ at 
the end; 
(2) in subparagraph (B), by striking the period 
at the end and inserting ‘‘; or’’; and 
(3) by adding at the end the following: 
‘‘(C) the amount or legality of any amount aris-
ing in connection with an ad valorem tax on real or 
personal property of the estate, if the applicable pe-
riod for contesting or redetermining that amount 
under any law (other than a bankruptcy law) has ex-
pired.’’. 
SEC. 702. TREATMENT OF FUEL TAX CLAIMS. 
Section 501 of title 11, United States Code, is 
amended by adding at the end the following: 
‘‘(e) A claim arising from the liability of a debtor for 
fuel use tax assessed consistent with the requirements of 
section 31705 of title 49 may be filed by the base jurisdic-
259
tion designated pursuant to the International Fuel Tax 
Agreement (as defined in section 31701 of title 49) and, 
if so filed, shall be allowed as a single claim.’’. 
SEC. 703. NOTICE OF REQUEST FOR A DETERMINATION OF 
TAXES. 
Section 505(b) of title 11, United States Code, is 
amended—
(1) in the first sentence, by inserting ‘‘at the 
address and in the manner designated in paragraph 
(1)’’ after ‘‘determination of such tax’’; 
(2) by striking ‘‘(1) upon payment’’ and insert-
ing ‘‘(A) upon payment’’; 
(3) by striking ‘‘(A) such governmental unit’’ 
and inserting ‘‘(i) such governmental unit’’; 
(4) by striking ‘‘(B) such governmental unit’’ 
and inserting ‘‘(ii) such governmental unit’’; 
(5) by striking ‘‘(2) upon payment’’ and insert-
ing ‘‘(B) upon payment’’; 
(6) by striking ‘‘(3) upon payment’’ and insert-
ing ‘‘(C) upon payment’’; 
(7) by striking ‘‘(b)’’ and inserting ‘‘(2)’’; and 
(8) by inserting before paragraph (2), as so 
designated, the following:
260
‘‘(b)(1)(A) The clerk shall maintain a list under 
which a Federal, State, or local governmental unit respon-
sible for the collection of taxes within the district may—
‘‘(i) designate an address for service of requests 
under this subsection; and 
‘‘(ii) describe where further information con-
cerning additional requirements for filing such re-
quests may be found. 
‘‘(B) If such governmental unit does not designate 
an address and provide such address to the clerk under 
subparagraph (A), any request made under this subsection 
may be served at the address for the filing of a tax return 
or protest with the appropriate taxing authority of such 
governmental unit.’’. 
SEC. 704. RATE OF INTEREST ON TAX CLAIMS. 
(a) IN GENERAL.—Subchapter I of chapter 5 of title 
11, United States Code, is amended by adding at the end 
the following: 
‘‘§ 511. Rate of interest on tax claims 
‘‘(a) If any provision of this title requires the pay-
ment of interest on a tax claim or on an administrative 
expense tax, or the payment of interest to enable a creditor 
to receive the present value of the allowed amount of a 
tax claim, the rate of interest shall be the rate determined 
under applicable nonbankruptcy law.
261
‘‘(b) In the case of taxes paid under a confirmed plan 
under this title, the rate of interest shall be determined 
as of the calendar month in which the plan is confirmed.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for subchapter I of chapter 5 of title 11, United States 
Code, is amended by adding at the end the following:
‘‘511. Rate of interest on tax claims.’’.
SEC. 705. PRIORITY OF TAX CLAIMS. 
Section 507(a)(8) of title 11, United States Code, is 
amended—
(1) in subparagraph (A)—
(A) in the matter preceding clause (i), by 
inserting ‘‘for a taxable year ending on or be-
fore the date of the filing of the petition’’ after 
‘‘gross receipts’’; 
(B) in clause (i), by striking ‘‘for a taxable 
year ending on or before the date of the filing 
of the petition’’; and 
(C) by striking clause (ii) and inserting the 
following: 
‘‘(ii) assessed within 240 days before 
the date of the filing of the petition, exclu-
sive of—
‘‘(I) any time during which an 
offer in compromise with respect to 
that tax was pending or in effect dur-
262
ing that 240-day period, plus 30 days; 
and 
‘‘(II) any time during which a 
stay of proceedings against collections 
was in effect in a prior case under 
this title during that 240-day period, 
plus 90 days.’’; and 
(2) by adding at the end the following: 
‘‘An otherwise applicable time period specified in 
this paragraph shall be suspended for any period 
during which a governmental unit is prohibited 
under applicable nonbankruptcy law from collecting 
a tax as a result of a request by the debtor for a 
hearing and an appeal of any collection action taken 
or proposed against the debtor, plus 90 days; plus 
any time during which the stay of proceedings was 
in effect in a prior case under this title or during 
which collection was precluded by the existence of 1 
or more confirmed plans under this title, plus 90 
days.’’. 
SEC. 706. PRIORITY PROPERTY TAXES INCURRED. 
Section 507(a)(8)(B) of title 11, United States Code, 
is amended by striking ‘‘assessed’’ and inserting ‘‘in-
curred’’.
263
SEC. 707. NO DISCHARGE OF FRAUDULENT TAXES IN CHAP-
TER 13. 
Section 1328(a)(2) of title 11, United States Code, 
as amended by section 314, is amended by striking ‘‘para-
graph’’ and inserting ‘‘section 507(a)(8)(C) or in para-
graph (1)(B), (1)(C),’’. 
SEC. 708. NO DISCHARGE OF FRAUDULENT TAXES IN CHAP-
TER 11. 
Section 1141(d) of title 11, United States Code, as 
amended by sections 321 and 330, is amended by adding 
at the end the following: 
‘‘(6) Notwithstanding paragraph (1), the confirma-
tion of a plan does not discharge a debtor that is a cor-
poration from any debt—
‘‘(A) of a kind specified in paragraph (2)(A) or 
(2)(B) of section 523(a) that is owed to a domestic 
governmental unit, or owed to a person as the result 
of an action filed under subchapter III of chapter 37 
of title 31 or any similar State statute; or 
‘‘(B) for a tax or customs duty with respect to 
which the debtor—
‘‘(i) made a fraudulent return; or 
‘‘(ii) willfully attempted in any manner to 
evade or to defeat such tax or such customs 
duty.’’.
264
SEC. 
709. 
STAY 
OF 
TAX 
PROCEEDINGS 
LIMITED 
TO 
PREPETITION TAXES. 
Section 362(a)(8) of title 11, United States Code, is 
amended by striking ‘‘the debtor’’ and inserting ‘‘a cor-
porate debtor’s tax liability for a taxable period the bank-
ruptcy court may determine or concerning the tax liability 
of a debtor who is an individual for a taxable period end-
ing before the date of the order for relief under this title’’. 
SEC. 710. PERIODIC PAYMENT OF TAXES IN CHAPTER 11 
CASES. 
Section 1129(a)(9) of title 11, United States Code, 
is amended—
(1) in subparagraph (B), by striking ‘‘and’’ at 
the end; 
(2) in subparagraph (C), by striking ‘‘deferred 
cash payments,’’ and all that follows through the 
end of the subparagraph, and inserting ‘‘regular in-
stallment payments in cash—
‘‘(i) of a total value, as of the effective 
date of the plan, equal to the allowed 
amount of such claim; 
‘‘(ii) over a period ending not later 
than 5 years after the date of the order for 
relief under section 301, 302, or 303; and 
‘‘(iii) in a manner not less favorable 
than the most favored nonpriority unse-
265
cured claim provided for by the plan (other 
than cash payments made to a class of 
creditors under section 1122(b)); and’’; 
and 
(3) by adding at the end the following: 
‘‘(D) with respect to a secured claim which 
would otherwise meet the description of an un-
secured claim of a governmental unit under sec-
tion 507(a)(8), but for the secured status of 
that claim, the holder of that claim will receive 
on account of that claim, cash payments, in the 
same manner and over the same period, as pre-
scribed in subparagraph (C).’’. 
SEC. 711. AVOIDANCE OF STATUTORY TAX LIENS PROHIB-
ITED. 
Section 545(2) of title 11, United States Code, is 
amended by inserting before the semicolon at the end the 
following: ‘‘, except in any case in which a purchaser is 
a purchaser described in section 6323 of the Internal Rev-
enue Code of 1986, or in any other similar provision of 
State or local law’’. 
SEC. 712. PAYMENT OF TAXES IN THE CONDUCT OF BUSI-
NESS. 
(a) PAYMENT OF TAXES REQUIRED.—Section 960 of 
title 28, United States Code, is amended—
266
(1) by inserting ‘‘(a)’’ before ‘‘Any’’; and 
(2) by adding at the end the following: 
‘‘(b) A tax under subsection (a) shall be paid on or 
before the due date of the tax under applicable nonbank-
ruptcy law, unless—
‘‘(1) the tax is a property tax secured by a lien 
against property that is abandoned under section 
554 of title 11, within a reasonable period of time 
after the lien attaches, by the trustee in a case 
under title 11; or 
‘‘(2) payment of the tax is excused under a spe-
cific provision of title 11. 
‘‘(c) In a case pending under chapter 7 of title 11, 
payment of a tax may be deferred until final distribution 
is made under section 726 of title 11, if—
‘‘(1) the tax was not incurred by a trustee duly 
appointed or elected under chapter 7 of title 11; or 
‘‘(2) before the due date of the tax, an order of 
the court makes a finding of probable insufficiency 
of funds of the estate to pay in full the administra-
tive expenses allowed under section 503(b) of title 
11 that have the same priority in distribution under 
section 726(b) of title 11 as the priority of that 
tax.’’.