IRS Says It Can Target 'Gap Interest' On Bankrupt Lawyer

Law360, New York (January 13, 2014, 5:38 PM EST) -- The Internal Revenue Service can collect tax debt from a bankrupt attorney because the debt was not discharged in his Chapter 11 plan, the agency told an Arizona federal judge on Monday.

The IRS asked the judge to reverse a 2009 decision of the bankruptcy court, which ruled that the agency violated a discharge injunction for Arizona attorney Logan Johnston when it tried to collect interest on his tax debt that incurred during the four-year period between his filing for bankruptcy and getting a reorganization plan...
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