§ 507

In re Paradis

Debtors filed a petition under chapter 13 of the Bankruptcy Code, and the Internal Revenue Service ("IRS") filed a secured claim and an unsecured claim against the debtors' bankruptcy estate. The debtors filed an objection to the IRS's unsecured claim and asked the court to confirm a plan they proposed that did not give the IRS's unsecured claim priority status. The parties submitted the issue on a stipulated record.
Ruling: 
IRS claim for taxes assessed more than three years before petition date could be treated as unsecured in plan.
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Consumer case opionion summary, case decided on September 10,2012, LexisNexis #1012-048

In re DeWitt Rehab. & Nursing Ctr. Inc.

A staffing service contended that a portion of its claim was entitled to priority status under 11 U.S.C.S. § 507(a)(5) as contributions to an employee benefit plan. The chapter 11 debtor filed a motion to expunge the priority portion of the claimant's proof of claim.
Ruling: 
Claim for third party payments to employee benefit plan not maintained by debtor was a general unsecured claim.
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Commercial case opionion summary, case decided on August 17,2012, LexisNexis #0912-043

International Tobacco Partners Ltd. V. United States Dept of Agric. (In re International Tobacco Partners Ltd.)

Plaintiff debtor filed a complaint against defendant, the U.S. Department of Agriculture (USDA), alleging, inter alia, that amounts owed by the debtor to USDA under the Fair and Equitable Tobacco Reform Act of 2004 (FETRA), 7 U.S.C.S. § 518 et seq., were not a tax, and, if the amounts owed were taxes, then they should be deemed excise taxes under 11 U.S.C.S. § 507(a)(8)(E).
Ruling: 
Assessments due under the Fair and Equitable Tobacco Reform Act of 2004 were excise taxes for which USDA was entitled to priority claim.
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Commercial case opionion summary, case decided on April 06,2012, LexisNexis #0512-011

Michigan Dept of Treasury v. Hight (In re Hight)

Michigan Department of Treasury objected to a protective proof-of-claim for an income tax debt filed on its behalf by debtor, who filed for bankruptcy in January 2009, before the return and payment for the taxes were due. A bankruptcy court overruled the objection, finding that the claim was permitted. The United States District Court for the Western District of Michigan at Grand Rapids affirmed. The Treasury appealed.
Ruling: 
Protective proof of claim filed by debtor for income tax debt owed to state was properly allowed.
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Consumer case opionion summary, case decided on March 05,2012, LexisNexis #0312-121

In re Aguirre

A chapter 13 trustee objected to the allowance of a purported 11 U.S.C.S. § 507(a)(1)(A) priority claim for a domestic support obligation (DSO) asserted by a chapter 7 trustee in the bankruptcy case of the debtor's former spouse.
Ruling: 
Claim for payment for former spouse's interest in 401(k) account pursuant to divorce decree was not a domestic support obligation and not a priority claim.
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Consumer case opionion summary, case decided on February 27,2012, LexisNexis #0312-081

Fagan v. Collection Div. (In re Fagan)

Chapter 7 debtors filed a complaint against Collection Division, State of Michigan Department of Treasury (State), alleging that the international fuel tax owed by the debtor wife to the State was not within the non-dischargeablity exception of 11 U.S.C.S. § 523(a)(1). The State filed a motion to dismiss.
Ruling: 
Taxes owed to state pursuant to International Fuel Tax Agreement were excise taxes on transactions and nondischargeable.
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Consumer case opionion summary, case decided on February 14,2012, LexisNexis #0312-006

Morrison v. SL Liquidating Inc. (In re SL Liquidating Inc.)

When claimant, a former employee of debtor, sought priority treatment for his claim against a "rabbi trust" maintained by debtor, the administrator of debtor's post-consummation trust, asserted an objection on the basis that claimant was not entitled to priority under 11 U.S.C.S. § 507.
Ruling: 
Claim against rabbi trust was not entitled to priority treatment.
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Commercial case opionion summary, case decided on February 06,2012, LexisNexis #0312-044

Kolve v. IRS (In re Kolve)

Plaintiff debtors filed an action against defendant Internal Revenue Service (IRS) to determine whether their income taxes for 2005 and 2006 were dischargeable under 11 U.S.C.S. §§ 507(a)(8) and 523(a)(1). Plaintiffs filed a motion for judgment on the pleadings, which the court treated as a motion for summary judgment.
Ruling: 
Taxes due more than three years before petition date and after confirmation in prior chapter 13 case were dischargeable.
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Consumer case opionion summary, case decided on September 22,2011, LexisNexis #1211-010

In re Krueger

The former spouse of a bankruptcy debtor filed a priority claim based on the debtor's obligation to pay the spouse's mortgage and vehicle expenses under a divorce agreement. The debtor objected to the spouse's claim on the ground that the obligations were not domestic support obligations entitled to priority under 11 U.S.C.S. § 507(a)(1), and the spouse objected to confirmation of the debtor's plan which did not provide priority.
Ruling: 
Confirmation denied due to failure to treat domestic support order as priority secured claim.
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Consumer case opionion summary, case decided on September 16,2011, LexisNexis #1011-043

California Franchise Tax Bd. V. Kendall (In re Jones)

Appellant, the California Franchise Tax Board (FTB), challenged a decision of the U.S. Bankruptcy Appellate Panel for the Ninth Circuit, which affirmed a bankruptcy court ruling in favor of appellee Chapter 7 debtor that certain tax debt was excepted from discharge.
Ruling: 
Post-chapter 13 petition tax debt was not excepted from discharge in subsequent post- confirmation, post-discharge chapter 7 case.
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Consumer case opionion summary, case decided on September 14,2011, LexisNexis #1011-013

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