IRS Immune From Bankruptcy Trustees, 7th Circ. Hears

Law360, Chicago (December 02, 2013, 4:48 PM ET) -- The Internal Revenue Service pressed the Seventh Circuit Monday to overturn a decision holding that the agency lacks sovereign immunity against fraudulent transfer claims brought by a trustee under the Bankruptcy Code, arguing that the trustee must be treated the same as an unsecured creditor would.

During oral arguments in Chicago, Thomas Clark, an attorney for the U.S. Department of Justice’s Tax Division, said the bankruptcy court and district court both erred in finding that the trustee for debtor Equipment Acquisition Resources Inc. could recover more...
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