IRS began collection efforts for penalties for failing to pay withholding taxes on a Debtor’s business.
Shortly after the collection began, the Debtor filed a bankruptcy and the IRS filed a Proof of Claim. The Debtor filed an objection to the IRS’ Proof of Claim and sent a copy to the address on the Proof of Claim.
21 days passed and the IRS sat on their rights and did not file a response. The Bankruptcy Court sustained the objection and disallowed the claim.
IRS moved to vacate the Order disallowing its claim.
The bankruptcy judge agreed with the IRS and vacated the Order.
Debtor appealed to District Court and the Order of the Bankruptcy Court was affirmed and claim was allowed.
Debtor appealed to the 8th Circuit Court of Appeals and the matter was reversed and remained.
Appellant Court agreed with the Debtor and the IRS’ $93K claim was not allowed.
The Debtor won – It pays to appeal and fight for your rights – The IRS fell asleep at the wheel. Deadlines work both ways – IRS must follow deadlines as all taxpayers must.
Bankruptcy is a specialized field and you should always hire a Board Certified Attorney to fight for your rights.
Call me (201) 446-5904: Ralph A. Ferro, Jr., Esq. – Board Certified Bankruptcy Lawyer.