Pension excise tax entitled to bankruptcy priority.Mansfield Tire & Rubber filed a petition under chapter 11 of the Bankruptcy Code Bankruptcy Code may refer to:
The bankruptcy trustees claimed the section 4971 liability was not an excise tax Excise Tax 1. An indirect tax charged on the sale of a particular good. 2. A penalty tax applied to ineligible transactions in retirement accounts. This penalty is assessed by and paid to the IRS. Notes: 1. but a disguised penalty and thus not entitled to priority under section 507(a)(7)(E) of the Bankruptcy Code. That section grants priority over certain other claims to unsecured goverment claims for "excise taxes." The Bankruptcy Court bankruptcy court n. the specialized Federal court in which bankruptcy matters under the Federal Bankruptcy Act are conducted. There are several bankruptcy courts in each state, and each one's territory covers several counties. and the district court both agreed with the bankruptcy trustees. Result: The Sixth Circuit Court of Appeals disagreed. Regardless of the regulatory nature of the section 4971 tax, Congress has labeled it an "excise tax." And the Bankruptcy Code grants priority to excise taxes, without further definition or limitation. Therefore, the Bankruptcy Code's plain language mandates the section 4971 excise tax be given priority; the courts cannot read a modification into the statute. |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion