28 U.S.C. § 960: Tax liability

Summary

Officers and agents doing business under a U.S. court’s authority must pay the same federal, State, and local taxes a person or company would. Taxes must be paid by their normal due date, unless the tax is a property tax on property a bankruptcy trustee abandons under section 554 of title 11, or unless title 11 specifically excuses the payment. In chapter 7 cases, tax payment can be delayed until final distribution under section 726 of title 11 if the tax was not created by the chapter 7 trustee or if, before the due date, the court finds the estate likely does not have enough money to pay certain administrative expenses under section 503(b) that share the same priority under section 726(b).

Title 28, §960

Judiciary and Judicial Procedure, Source: USLM XML via OLRC

(a)Any officers and agents conducting any business under authority of a United States court shall be subject to all Federal, State and local taxes applicable to such business to the same extent as if it were conducted by an individual or corporation.

(b)A tax under subsection (a) shall be paid on or before the due date of the tax under applicable nonbankruptcy law, unless—

(1)the tax is a property tax secured by a lien against property that is abandoned under section 554 of title 11, within a reasonable period of time after the lien attaches, by the trustee in a case under title 11; or

(2)payment of the tax is excused under a specific provision of title 11.

(c)In a case pending under chapter 7 of title 11, payment of a tax may be deferred until final distribution is made under section 726 of title 11, if—

(1)the tax was not incurred by a trustee duly appointed or elected under chapter 7 of title 11; or

(2)before the due date of the tax, an order of the court makes a finding of probable insufficiency of funds of the estate to pay in full the administrative expenses allowed under section 503(b) of title 11 that have the same priority in distribution under section 726(b) of title 11 as the priority of that tax.

Notes & Related Subsidiaries

Historical and Revision Notes

Based on title 28, U.S.C., 1940 ed., § 124a (June 18, 1934, ch. 585, 48 Stat. 993). A proviso in section 124a of title 28, U.S.C., 1940 ed., relating to taxes accruing prior to the

Effective Date

of the 1934 act, was omitted as obsolete. References in section 124a of title 28, U.S.C., 1940 ed., to specific officers was omitted as covered by the words “Any officers.” Word “Federal” was added before “State” in recognition of the liability of such officers for Federal taxes under the revenue laws. Changes in phraseology were made.

Editorial Notes

Amendments

2005—Pub. L. 109–8 designated existing provisions as subsec. (a) and added subsecs. (b) and (c).

Statutory Notes and Related Subsidiaries

Effective Date

of 2005 AmendmentAmendment by Pub. L. 109–8 effective 180 days after Apr. 20, 2005, and not applicable with respect to cases commenced under Title 11, Bankruptcy, before such

Effective Date

, except as otherwise provided, see section 1501 of Pub. L. 109–8, set out as a note under section 101 of Title 11.

§960 Tax Liability

Summary

Title 28, §960

Notes & Related Subsidiaries

Historical and Revision Notes

Effective Date

Editorial Notes

Amendments

Statutory Notes and Related Subsidiaries

Effective Date

Effective Date

Citations & Metadata