Sometimes, a Federal Tax Lien Will Never Be Enforceable in Bankruptcy
Congress left a gap in the statute for perfecting a tax lien on personal property against someone who has no ascertainable residence.
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First Circuit Majority Says Sovereign Immunity Abrogated as to the Puerto Rico Oversight Board
Dissenter implies that the First Circuit should sit en banc and rule that the Oversight Board’s sovereign immunity was not waived
Two Circuits Now Give Priority Status to Obamacare’s Individual Mandate Penalty
The Affordable Care Act’s ‘individual mandate’ was a tax measured by income, thus giving the IRS a priority tax claim.
Circuits More Deeply Split on Waiver of Sovereign Immunity for Native American Tribes
Over a vigorous dissent, the First Circuit Joins the Ninth Circuit by holding that Section 106(a) waives tribes’ sovereign immunity.
Court Says City of Chicago Overcharged Residents for Vehicle Sticker Violations
An Illinois appellate court ruled Friday that the city of Chicago unlawfully overcharged some residents who were ticketed for failing to have a vehicle sticker, which one car owner said led him to declare bankruptcy after he racked up thousands of dollars in fines, the Chicago Tribune reported. Attorney Jacie Zolna, who represents three residents in a lawsuit that led to the ruling, said the decision sets the stage for a possible class-action lawsuit that could see hundreds of millions of dollars in ticket debt come under scrutiny. Vehicle stickers are at the heart of the case. The city charges $95 annually for a passenger car sticker, with the money going toward road maintenance. Failing to display a sticker can mean a ticket. Rodney Shelton of West Humboldt Park said that a car he bought couldn’t pass the emissions test, and without that he couldn’t buy a city vehicle sticker. Even though he parked the car in a private lot, he said, the city ticketed him dozens of times for not having the sticker until the fees and penalties reached about $20,000. He had to declare bankruptcy before he could start paying it back, he said. Mayor Lori Lightfoot campaigned against the city’s system of fines and fees, frequently criticizing the city for balancing its budget on the backs of taxpayers by exacting regressive penalties through tickets. Within months of taking office in 2019, the mayor shepherded through the City Council a series of reforms to the city’s fines-and-fees system that ended the practice of suspending the driver’s licenses of people who haven’t paid parking tickets, reduced vehicle sticker penalties and created a six-month payment plan to give those with ticket debt more time to pay.
Liens on Impounded Cars Are Judicial Liens that May Be Avoided, Seventh Circuit Says
The City of Chicago argued unsuccessfully that liens on cars are statutory because they arise automatically when the car is impounded.
Disney to Lose Special Tax Status in Florida Amid ‘Don’t Say Gay’ Clash
The Florida House voted to revoke Disney World’s designation as a special tax district — a privilege that Disney has held for 55 years, effectively allowing the company to self-govern its 25,000-acre theme park complex, the New York Times reported. The Florida Senate voted on Wednesday to eliminate the special zone, which is called the Reedy Creek Improvement District. Having cleared the way to this outcome with a formal proclamation, Gov. Ron DeSantis will almost certainly make the measure official by adding his signature. It would take effect in June next year. The swift effort to dissolve Reedy Creek by Florida Republicans has been widely seen as brazen retaliation after Disney, Florida’s largest private employer, paused political donations in the state and condemned a new education law that opponents call “Don’t Say Gay.” Among many things, the law prohibits discussion about sexual orientation and gender identity through the third grade in Florida classrooms and limits it for older students. The Reedy Creek Improvement District, enacted in 1967 to entice Disney to build a theme park 20 miles south of Orlando, saves the company millions of dollars annually in fees and taxes, experts estimate.
Sixth Circuit BAP Gives Priority Status to Obamacare’s Individual Mandate Penalty
A question may be headed to the Sixth Circuit, where debtors hope to create a circuit split.
Circuit Split Widens Sovereign Immunity for Section 544(b) Claims
The circuits are now split 2/1 on the waiver of sovereign immunity under Section 544(b) for lawsuits by a trustee based on claims that could have been made by an actual creditor.