Zazzali v. United States (In Re DBSI, Inc.)

OPINION

PAEZ, Circuit Judge:

We must decide whether a bankruptcy trustee can, through an adversary proceeding, avoid a debtor’s federal tax payment, or whether the Internal Revenue Service’s (“IRS” or “government”) sovereign immunity prevents such relief. To resolve this question, we must consider the interplay between two Bankruptcy Code statutes: 11 U.S.C. §§ 106(a)(1) (“Section 106(a)(1)”) and 644(b)(1) (“Section 644(b)(1)”). In Section 106(a)(1), Congress unambiguously abrogated sovereign immunity “with respect to” Section 544(b)(1). Under Section 544(b)(1), a trustee may avoid fraudulent…