Opinion ID: 4777078
Heading Depth: 2
Heading Rank: 4

Heading: The Bankruptcy Petition and the Tax

Text: Refund Separately, on May 2, 2014, the Debtors filed voluntary Chapter 7 bankruptcy petitions. Shortly before doing so, in April 2014, they filed a consolidated federal tax return for 7 2013. The return showed net operating losses for 2013 and sought a “carryback” refund of approximately $5.5 million in federal income taxes that one or more of the Debtors had paid in 2011 (the “Tax Refund”).2 Because the Debtors had defaulted on many United States contracts, including the NPCC Contract, the United States placed a hold on payment of the Tax Refund, asserting the right to set off the $5.5 million against losses caused by the Debtors.