Excise tax in bankruptcy

Article Abstract:

The US 6th Circuit Court of Appeals in US v. Mansfield Tire & Rubber Co. correctly interpreted Bankruptcy Code s 507(a)(7) and held that since an assessment caused by a debtor's inadequate pension plan funding constituted an excise tax and not a penalty, the IRS deserved priority debt payment status over other creditors. Though the 6th Circuit's decision contradicts decisions from other circuit courts characterizing such assessments as penalties to be subordinated to other creditor's claims, the 6th Circuit approach comports with congressional powers to levy and prioritize taxes, and in this case, to compensate for costs associated with federal benefit plans.

Excise taxes, Case Note, Bankruptcy discharge, Excise tax

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Voidable preferences and the running account - the High Court reconsiders

Article Abstract:

The Australian High Court broadened the meaning of 'running account' in the bankruptcy case of Airservices Australia v. Ferrier. This decision allows creditors to continue doing business with their debtors without fear that payment will constitute a preference. The court examined part 5.7B of the Corporations Law and section 122 of the Bankruptcy Act 1966 in its decision.

Australia, Accounting, Bankruptcy

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The bankruptcy diaries

Article Abstract:

Best Case Solutions legal software Best Case Bankruptcy offers excellent features at a reasonable price.

Product/Service Evaluation, Legal case management software, Litigation support software, Best Case Bankruptcy (Legal practice software)

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