IRS Immune From State Fraud Transfer Claims, 7th Circ. Says

Law360, New York (February 05, 2014, 4:29 PM ET) -- The Seventh Circuit on Tuesday said the Internal Revenue Service could not be sued in a bankruptcy-related action to recoup an allegedly fraudulent federal tax payment, finding the IRS immune from such state law claims under the Bankruptcy Code.

In a unanimous opinion, Judge Joel M. Flaum said the Bankruptcy Code gives the IRS immunity to state fraudulent transfer lawsuits because of its unambiguous language, which clearly bars unsecured creditors from bringing such actions outside of bankruptcy.

“We decline [the] invitation to read an exception into...
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Case Information

Case Title

USA v. Equipment Acquisition Resource


Case Number

13-1480

Court

Appellate - 7th Circuit

Nature of Suit

Date Filed

March 4, 2013

Law Firms

Government Agencies