CCA 201107018: Bankruptcy referral guidance updated for current practice

Plain-English summary

Chief Counsel advice explains that an IRS notice updated the authority to refer certain bankruptcy matters to the Department of Justice. The notice removed two exceptions and added several matters that could generally be sent directly, including objections involving the valuation or supersession of IRS claims, missed plan payments or post-confirmation liabilities, and agreed cash-collateral or adequate-protection hearings. The advice states that the notice does not apply in districts or divisions with SAUSA programs because qualifying direct referrals are matters a SAUSA can handle.

Ruling snapshot

• Question: How does Notice CC-2011-006 affect referrals of certain bankruptcy matters?
• Outcome: Advice given.
• Key authorities: Notice CC-2011-006; CCDM 34.11.1.2.

Full text (IRS public release)

ID: CCA_2011011313353950 Number: 201107018
Release Date: 2/18/2011
Office: ----------
UILC: 09.00.00-00

From: -----------------------
Sent: Thursday, January 13, 2011 1:35:41 PM
To: ------------------------------------
Cc: -----------------
Subject: FW: Notice CC-2011-006, Authority to Refer Certain Bankruptcy Matters to the Department of Justice

In CC Notice 2011-006, the delegation of authority to refer certain matters in bankruptcy cases was updated to reflect current practice and changes in the law. The changes were fairly minor - the exceptions for complaints to determine dischargeability where debtor has filed consecutive bankruptcies or defaulted on an offer in compromise were deleted, and the following were added to the list of matters than can (and generally should) be direct referrals:

· Responses to objections to Internal Revenue Service claims that are based on valuation of the property securing the claim;
· Responses to objections to Internal Revenue Service claims that are based on the fact that the claim has been superseded by a subsequent claim;
· Motions relating to the debtors’ failure to make timely payments under a Plan and/or accrual of post-confirmation liabilities; and · Agreed cash collateral or adequate protection hearings, including stipulations or agreements for the use of the collateral.

To answer a question I was asked earlier today,this notice would have no application in districts/divisions with SAUSA programs. Any matter that qualifies as a direct referral would be on the list of matters that a SAUSA can handle, see CCDM 34.11.1.2.

Please let me know if you have any further questions.