§§ 101-1330 ("Code"), seeking an order determining that the Agway, Inc. Pursuant to the Confirmation Order, the Liquidating Trustee was appointed to liquidate and distribute the Liquidating Trust Assets and Claims. under section 505(b) of the Bankruptcy Code for all returns filed for, or on behalf of, the Liquidating Trust for all taxable periods through the dissolution of the Liquidating Trust." See Plan, § 7.01(f); see also Art. Such a ruling would establish a precedent for a former debtor to return to bankruptcy court to have any and all of its future tax consequences determined. The plan provided that certain assets, rights and powers were transferred to a liquidating trust. "Subject matter jurisdiction `cannot be conferred by consent' of the parties . Nor was it originally contemplated in the Plan, as originally confirmed on April 28, 2004. The Court has jurisdiction over this core proceeding pursuant to 28 U. The IRS reserved its rights with respect to determining whether the Retirement Plan is a "qualified plan." See Order, signed October 10, 2007 (Dkt. On July 11, 2008 Agway filed its IRS Form 5330, Return of Excise Taxes Related to Employee Benefit Plans, reporting a "0" excise tax liability arising from the Capstone transaction. Thus, if Code § 505 does not govern the Liquidating Trustee's request in the Motion, then the Declaratory Judgment Act bars the Court from considering it. It first analyzed the issue of when a tax issue must arise in order to be within the scope of § 505(a). As in Allis-Chalmers, there had been no action by the IRS at the time of the Motion. See Matter of Fed Pak Systems, Inc., 80 F.3d 207, 211-12 (7th Cir. The purchase price for the property, known as the “Quarry,” was around .5 million.
On the cross-complaint, the trial court entered judgment against plaintiff based on the doctrine of collateral estoppel, which precludes a party from relitigating issues actually decided in a prior proceeding.
The trial court reasoned that the default judgment entered against plaintiff's companies precluded him from litigating his individual liability because he was in privity with them.
It asserts that the Liquidating Trustee is seeking a comfort order as to possible future harm should the IRS ultimately dispute the tax liabilities. The United States points out that "[t]he IRS, by statute, has at least three years to examine the tax returns of an entity other than a bankruptcy estate, including those of a post-confirmation bankruptcy debtor and the courts have no authority to truncate that period through a declaratory judgment or injunction." Id., citing Sterling Consulting Corp. It observes that in this case the Motion was filed by "the trustee of a liquidating trust created under state law to carry out the provisions of a confirmed Chapter 11 plan that vested all property in the debtor and then transferred it to the liquidating trust." See Response of the United States at 9. However, concluding that the Liquidating Trustee has standing to file a motion, does not address the issue of the Court's jurisdiction to grant the requested relief therein.
According to the United States, "[w]hat the liquidating trustee thus seeks in the guise of a § 505(a) determination is really a § 505(b) discharge, which, as already demonstrated, only applies whan [sic] a bankruptcy trustee files a return reporting the tax liability of a bankruptcy estate." Response of IRS, filed February 19, 2009 (Dkt. Thus, the United States takes the position that the relief sought "goes beyond the waiver of sovereign immunity in section 505(b) and, consequently, the Court lacks jurisdiction to entertain relief under § 505(b)." Id. As noted previously, the United States argues that Code § 505(b) does not apply to determinations sought by a trustee of a liquidating trust created under state law to carry out the provisions of a confirmed Chapter 11 plan by which all property was vested in the debtor and then transferred to the liquidating trust. In matters involving the United States, the issue of sovereign immunity is critical.
RKG negotiated a separate agreement with a different property owner to purchase a four-acre parcel adjacent to the Quarry.