In re 800Ideas.com, Inc.

MEMORANDUM DECISION ON REMAND OF THE CHAPTER 7 TRUSTEE’S OBJECTION TO PROOF OF CLAIM #6 (INTERNAL REVENUE SERVICE)

LAURA S. TAYLOR, Chief Judge, United States Bankruptcy Court

This matter comes before the Court on remand from the Bankruptcy Appellate Panel of the Ninth Circuit (“BAP”) and presents a narrow question: When a chapter 71 trustee (the “Trustee”) incurs a statutory penalty for his unreasonable failure to timely file federal tax returns for an S corporation debtor, should the statutory penalty be accorded administrative priority under section 503(b)? The Court determines that the…