Monday, June 24, 2024

SCOTUS To Review If Trustee Can Recover Tax Payments To The IRS

According to Law360The U.S. Supreme Court on June 24, 2024 said in U.S. v. Miller, case number 23-824, that it would review a Tenth Circuit decision that found that the bankruptcy trustee of a defunct Utah company seeking Chapter 7 protection could recover $145,000 in tax payments from the IRS.

In an order list, the Supreme Court said it would grant a request by the government to review the Tenth Circuit's June 2023 decision, which the U.S. said created a circuit split. 

The government argued in a February petition that the Tenth Circuit wrongly sided with the Fourth and Ninth Circuits, and split from the Seventh, when it ordered the IRS in June to return $145,000 in tax payments made by the insolvent company, All Resort Group Inc., which had been obliged to pay other debts.

The company's bankruptcy trustee, David Miller, brought an adversary proceeding against the government to recover the payments under U.S. Bankruptcy Code Section 544(b), which allows a trustee to retroactively avoid a payment that is rendered void by other applicable laws, including state laws on fraudulent transfers, according to the petition.

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