Trustees were previously required to wait seven years after filing a tax return before distributing money to creditors.
Bankruptcy Taxation Committee
Committees
Not many founders of a new business consider, at the time the new business is founded, the potential U.S. federal income tax consequences to them should the new business fail. The type of business entity formed, and the treatment of that entity for U.S. federal tax purposes as either a corporation or a pass-through entity, can have a material U.S.
While the bankruptcy process may bring a new beginning, the Bankruptcy Code provides — and some say rightfully so — debtors with much less protection against tax claims than other types of claims for public policy and much-applauded revenue reasons.
Despite lingering questions concerning the scope of a bankruptcy court’s jurisdiction in the wake of Supreme Court decisions in Stern v. Marshall[1] and Wellness Int’l Network, Ltd., et al v.
The Bankruptcy Taxation Committee had a particularly active 2015, and we are headed into 2016 with a lot of momentum. Understanding how tax issues affect the bankruptcy process is key to any case. Join our committee to further your knowledge and appreciation of tax issues in bankruptcy.
Benjamin Franklin once famously said, “Nothing is certain except death and taxes.” The U.S. federal income tax rules certainly apply to both profitable companies and troubled companies to ensure that no party is left out of the fun. These tax consequences can have a material impact on both the current and future health of a debtor corporation, as well as on the type and amount of assets of the debtor corporation available to both creditors and purchasers of assets of the debtor corporation.
One of the most attractive benefits of a bankruptcy filing is the potential discharge of indebtedness.[1] However, the bankruptcy discharge may have significant tax consequences for the debtor. Generally, a taxpayer must include, in its gross income, any amount of debt that is discharged, or cancelled, other than by payment.[2]
26 U.S.C. § 6901 and Internal Revenue Code § 6901 enable the IRS Commissioner to collect deficient or underpaid corporate income taxes from a transferee of property. In the recently decided case of Slone v. Commissioner,[1] the appeals court was asked to decide whether the tax court had made an appropriate decision by holding that
Editor’s Note: The following article, “The Purchaser of a Tax Lien Is the Holder of a 'Tax Claim' Under 11 U.S.C. § 511(a),” won the prize for second place in the Seventh Annual ABI Bankruptcy Law Student Writing Competition. The author, Andrew Reardon, is a recent graduate of St. John’s University School of Law in Jamaica, N.Y. In addition to recognition and publication of his article in the Bankruptcy Taxation Committee Newsletter, Mr. Reardon receives a cash award of $1,250, sponsored by Jenner & Block LLP, and a one-year ABI membership.
Add the Western District of New York to those courts holding that in rem tax foreclosures are not presumed to provide reasonably equivalent value to a debtor. In Canandaigua Land Development LLC v. County of Ontario (In re Canandaigua Land Dev. LLC), 521 B.R. 457 (Bankr. W.D.N.Y.
Fri, 2016-04-15
Hospitality and the Tax Man: Historical Hospitality Tax Issues in Distress
Sat, 2015-04-18
Tax-Sharing Agreements in Bankruptcy that Have Been the Subject of Recent Appeals Courts Decisions
Thu, 2014-05-29
The purpose of this call was to seek thoughts, suggestions, and assistance in setting and achieving new goals and objectives for the Committee. For example, they discussed ideas and topics for future newsletters, webinars, and educational sessions at ABI’s Winter Leadership Conference and Annual Spring Meeting. Additionally, the Committee discussed ideas for networking events and special projects for the Committee. Participating in future calls is a great way to get more involved!