Carpenter v. MT Dept. of Labor and Industry Unemployment Insurance Contributions Bureau (In re Carpenter)

Summarized by David Hercher , U.S. Bankruptcy Court, District of Oregon
10 years 3 months ago

Citation:

In re Carpenter, No. MT-14-1499-KlPaJu (9th Cir. B.A.P. Nov. 18, 2015).

Tag(s):

Ruling:

An individual debtor’s liability for unpaid Montana corporate unemployment taxes less than three years old is entitled to priority under 507(a)(8)(E).

Procedural context:

In this this chapter 11 case of two individuals, the Montana Department of Labor and Industry, Unemployment Insurance Contributions Bureau, filed a proof of claim for unemployment taxes not paid by a corporation for which the debtors were vicariously responsible for filing unemployment-tax returns and paying unemployment taxes. The bureau asserted priority for the claim under section 507(a)(8). The debtors objected to the claim, denying that it was a priority claim. The bankruptcy court overruled the objection and allowed the claim as a priority claim, 519 B.R. 811 (Bankr. D. Mont. 2014). On appeal, the BAP affirmed.

Facts:

The Montana statute imposing responsible-officer liability on the debtors is a tax of the same category as the underlying corporate tax, a section 507(a)(8)(E) excise tax. The tax at issue in this case was less than three years old and thus not stale.

Judge(s):

Jim D. Pappas and Meredith A. Jury, Bankruptcy Judges, and Christopher M. Klein, United States Bankruptcy Judge for the Eastern District of California, sitting by designation. Opinion by Judge Klein.

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