Tax Closure

Under the federal priority statute, 31 U.S.C. Section 3713, a receiver of an insolvent estate who knew or should have known about the existence of federal claims against the receivership estate, including tax claims, may be held personally liable for failing to pay all such federal claims to the extent there were funds available to […]

Tax Talk: Qualified Settlement Funds

In certain circumstances, a receivership may create a new and separate entity for income tax purposes called a qualified settlement fund (QSF). QSFs typically arise in criminal cases such as fraudulent investment schemes and other cases involving fraudulent and tortious conduct.1 The assets in the receivership are deemed transferred to the newly created QSF, resulting […]

Tax Talk: Filing Income Tax Returns

One of the first and most basic tax issues a receiver must address when taking on a new case is whether the receiver must file income tax returns and, if so, what kind of returns. And critically, a receiver who must file federal income tax returns must pay any tax liability reported on those returnsi […]

Tax Talk: Tips for Receivers; Appointment Orders

An order appointing a receiver should authorize the receiver to meet tax reporting and payment obligations that could potentially occur in the receivership. Broad authority is typically necessary since the receiver’s specific tax duties and obligations may not be known or even fully knowable until the receiver can determine the full nature and extent of […]