Bankruptcy Taxation

Tax Issues in Bankruptcy

Bankruptcy Code

Topics

Debtor’s Subchapter S Status Is Estate Property that an Owner Can’t Terminate

Bankruptcy Judge Russin declines to follow the Third Circuit and adopts the conclusion of bankruptcy courts holding that Sub S status is estate property.

Court :

11th Circuit

Florida

Florida Southern District

Three Circuits Agree: The ACA’s ‘Penalty’ Is Actually a Tax Entitled to Priority

Looking beyond the label assigned by the Affordable Care Act, three circuits have now held that failure to pay the ‘individual mandate’ for purchasing health insurance gave rise to a tax entitled to priority in bankruptcy.

Court :

6th Circuit

Modifying Terms of Loans Can Have Unexpected Income Tax Consequences

July

2025

Article Tags

IRS Has No Sovereign Immunity to Bar a Fraudulent Transfer Suit Under Section 544(b)

The circuits are now split 3/1, with the majority finding a waiver of sovereign immunity under Section 544(b)(1) for lawsuits by a trustee based on claims that an actual creditor could not have brought outside of bankruptcy.

Court :

10th Circuit