Judge Says Bankruptcy Court Ruling Is 'Problematic' For IRS

Law360 (December 3, 2019, 5:38 PM EST) -- A Delaware federal judge is recommending a quick hearing for an IRS appeal of a bankruptcy court order denying it a priority claim for a car insurance company's taxes, calling the decision "problematic" for all tax-collecting bodies.

In a ruling Monday, Chief U.S. Magistrate Judge Mary Pat Thynge recommended that the IRS be allowed to skip mandatory mediation in its appeal of a decision by the U.S. Bankruptcy Court for the District of Delaware, which said that the agency does not have a priority claim on Affirmative Insurance Holdings Inc.'s 2015 corporate income taxes because the company entered Chapter 7 partway...

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