The Oklahoma Bar Journal December 2023

3 years before the date of the filing of the petition; or

rule, as well as a more general tolling provision in the last “hang ing” paragraph of §507(a)(8), which states as follows: An otherwise applicable time period specified in this para graph shall be suspended for any period during which a governmental unit is prohibited under applicable nonbank ruptcy law from collecting a tax as a result of a request by the debtor for a hearing and an appeal of any collection action taken or proposed against the debtor, plus 90 days; plus any time during which the stay of proceedings was in effect in a prior case under this title or during which collection was precluded by the existence of 1 or more confirmed plans under this title, plus 90 days. Notably, as provided in §§523(a) (1)(A) and 507(a)(8)(C) and (G) above, certain taxes are nondischargeable regardless of age – including “trust fund” taxes the debtor is legally required to withhold or collect from others and certain compensatory (as opposed to punitive) tax penalties. The Bankruptcy Code has a sepa rate nondischargeability provision for a “fine, penalty, or forfeiture payable to and for the benefit of a governmental unit,” which applies to noncompensatory fines, penalties or forfeitures but notably excludes those relating to taxes that are dischargeable or that are “imposed with respect to a transaction or event that occurred” more than three years before the filing of the bankruptcy petition. 9 Note that a filing extension – extending the due date for a tax return – may impact the applicable time periods. In In re Hermann , 10 the

cases between the date the peti tion is filed and the earlier of the appointment of a trustee or entry of an order for relief. The latter addresses income or gross receipts taxes “not assessed before, but assessable, under applicable law or by agreement, after the com mencement of the case.” Both are nondischargeable. Additional priority tax claims that are nondischargeable pursu ant to Bankruptcy Code §523(a)(1) (A) and listed as priority claims under Bankruptcy Code §507(a)(8) include: (B) [property taxes] incurred before the commencement of the case and last payable without penalty after 1 year before the date of the filing of the petition; (C) [taxes] required to be collected or withheld and for which the debtor is liable in whatever capacity [including trust fund or withholding taxes]; (D) [employment taxes] on a wage, salary, or commission of a kind specified in paragraph (4) of this subsection 6 earned from the debtor before the date of the filing of the petition, whether or not actually paid before such date, for which a return is last due, under applicable law or under any extension, after 3 years before the date of the filing of the petition;

(ii) if a return is not required, a transaction occurring during the 3 years immedi ately preceding the date of the filing of the petition;

(F) [customs duties] arising out of the importation of merchandise –

(i) entered for consumption within 1 year before the date of the filing of the petition; (ii) covered by an entry liqui dated or reliquidated within 1 year before the date of the filing of the petition; or (iii) entered for consumption within 4 years before the date of the filing of the petition but unliquidated on such date, if the Secretary of the Treasury certifies that failure to liq uidate such entry was due to an investigation pending on such date into assessment of antidumping or counter vailing duties or fraud, or if information needed for the proper appraisement or clas sification of such merchan dise was not available to the appropriate customs officer before such date; or (G) [penalties] related to [claims] of a kind specified in this para graph and in compensation for actual pecuniary loss. As alluded to above, the time periods stated in §507(a)(8) may be tolled in certain instances. The Bankruptcy Code contains tolling provisions in §507(a)(8)(A)(ii)(I) and (II), 8 with respect to the 240-day

(E) [excise taxes 7 ] on –

(i) a transaction occurring before the date of the filing of the petition for which a return, if required, is last due, under applicable law or under any extension, after

Statements or opinions expressed in the Oklahoma Bar Journal are those of the authors and do not necessarily reflect those of the Oklahoma Bar Association, its officers, Board of Governors, Board of Editors or staff.

20 | DECEMBER 2023

THE OKLAHOMA BAR JOURNAL