Hall v. United States

This case arose when petitioners filed for Chapter 12 bankruptcy and then sold their farm. Under Chapter 12 of the Bankruptcy Code, farmer debtors could treat certain claims owed to a governmental unit resulting from the disposition of farm assets as dischargeable, unsecured liabilities. 11 U.S.C. 1222(a). The Court held that federal income tax liability resulting from petitioners' post-petition farm sale was not "incurred by the estate" under 11 U.S.C. 503(b) of the Bankruptcy Code and thus was neither collectible nor dischargeable in the Chapter 12 plan. Therefore, the Court affirmed the judgment of the Ninth Circuit. View "Hall v. United States" on Justia Law