Source: https://supreme.justia.com/cases/federal/us/566/10-875/opinion3.html
Timestamp: 2017-05-23 22:42:22
Document Index: 740599569

Matched Legal Cases: ['§503', '§1305', '§346', '§346', '§346', '§25', '§25', '§5', '§5', '§346', '§346', '§346', '§346']

Hall v. United States (Opinion by Justice Sotomayor) :: 566 U.S. ___ (2012) :: Justia U.S. Supreme Court Center Log In
These provisions suffice to resolve this case: Chapter 12 estates are not taxable entities. Petitioners, not the estate itself, are required to file the tax return and are liable for the taxes resulting from their postpetition farm sale. The postpetition federal income tax liability is not “incurred by the estate” and thus is neither collectible nor discharge- able in the Chapter 12 plan.
A provision in Chapter 13 confirms that postpetition income taxes fall outside §503(b). Section 1305(a)(1) pro- vides that “[a] proof of claim may be filed by any entity that holds a claim against the debtor . . . for taxes that become payable to a governmental unit while the case is pending.” (Emphasis added.) That provision gives holders of postpetition claims the option of collecting postpetition taxes within the bankruptcy case—an option that the Government would never need to invoke if postpetition tax liabilities were already collectible inside the bankruptcy. Accordingly, lest we render §1305 “ ‘inoperative or superfluous,’ ” Hibbs v. Winn, 542 U. S. 88, 101 (2004)
(cor- porate Chapter 11 debtor); Nicholas v. United States, 384 U. S. 678
A dispute over Committee jurisdiction led to the insertion of “State or local” before each mention of “law imposing a tax.” Compare H. R. 8200, 95th Cong., 1st Sess., §346 (1977), with §346, . Nonetheless, the House Report underscored that the policy behind §346 applied equally to federal taxes:
IRS manuals dating back to 1998 indicate that the Government did not view postpetition federal income taxes as collectible in an individ-ual debtor’s Chapter 12 plan, even when that view was adverse to its interests. See IRM §25.17.12.9.3 (2004); id., §25.17.12.9.3(1) (2002);id., §5.9, ch. 10.8(4) (1999); id., §5.9, ch. 10.8(4) (1998). Until the en-actment of , treating such taxes as priority claims in the plan would have assured the Government of full payment before or at the time of the plan.
The original §346 established that the estate of a corporate debtoris not a separate taxable entity, but nonetheless provided that “the trustee shall make any [State or local] tax return otherwise required . . . to be filed by or on behalf of such . . . corporation.” §§346(c)(1)–(2), . The current §346 similarly states, in the same provision deeming the debtor taxable when there is no separate taxable estate, that “[t]he trustee shall make such tax returns of income of corporations . . . . The estate shall be liable for any [State or local] tax imposed on such corporation.” §346(b).