Hall v. United States

Summary

The Court held that federal income tax liability from a postpetition farm sale in Chapter 12 bankruptcy is not “incurred by the estate” under 11 U.S.C. § 503(b) because the estate is not a separate taxable entity under the Internal Revenue Code. Therefore, such taxes are not priority claims eligible for dischargeable treatment under § 1222(a)(2)(A). Justice Breyer dissented, arguing the statute should be read to further Congress’ purpose of helping farmers.