Hall v. United States

Holding: The federal income tax liability resulting from petitioners’ post-petition farm sale is not “incurred by the estate” under Section 503(b) of the Bankruptcy Code and thus is neither collectible nor dischargeable in the Chapter 12 plan.

Plain English Summary: At issue was whether farmers who sell their farm while in bankruptcy have to pay capital gains tax to the IRS. The farmers argued that they could sell the farm and give the proceeds to their other creditors. However, the Court agreed with the IRS that the IRS must be paid before the other creditors.

Judgment: Affirmed, 5-4, in an opinion by Justice Sotomayor on May 14, 2012. Justice Breyer filed a dissenting opinion in which Justices Kennedy, Ginsburg and Kagan joined.

SCOTUSblog Coverage

• Opinion analysis: When worlds collide, the IRS wins and bankrupts shudder (Ronald Mann)
• Argument recap: Justices balance tax and bankruptcy policy (Ronald Mann)
• Argument preview: Justices balance tax and bankruptcy policy (Ronald Mann)

Briefs and Documents

Merits Briefs for the Petitioners

• Brief for Lynwood D. Hall and Brenda A. Hall
• Reply brief for Lynwood D. Hall and Brenda A. Hall
  

Amicus Briefs in Support of the Petitioner

• Brief for Donald W. Dawes and Phyllis C. Dawes
• Brief for Professors Neil E. Harl, Jack F. Williams, and Robert Himschoot

Merits Briefs for the Respondent

• Brief for respondent United States

Certiorari-stage documents

• Opinion below (9th Cir.)

• Petition for certiorari
• Petitioner’s reply
• Brief in opposition