Supreme Court Hands IRS Win Over Bankruptcy Trustee Clawback (3)

The IRS triumphed over a liquidating trustee at the US Supreme Court after a long-fought battle over payments that a transportation company made before it filed for bankruptcy.

The 8-1 ruling in United States v. Miller determined the Internal Revenue Service’s sovereign immunity outweighs US Bankruptcy Code and state law provisions governing how far back in time a trustee can reach to recover fraudulent transfers. The justices held that a bankruptcy trustee can’t void a debtor’s tax payment to the IRS when no creditor could’ve obtained the same relief under state fraudulent transfer laws outside of bankruptcy.

The ruling means ...