Thus, the Liquidating Trustee seeks a determination that "the excise tax and income tax liabilities as reported by Agway on the IRS Form 53-C Returns are accurate" in order for the Liquidating Trustee "to make distributions of the proceeds of the Capstone transaction without having to establish any reserve for those taxes." See Motion at ¶ 18.
Also on September 15, 2008, Agway filed a "Request for Prompt Determination," pursuant to Code § 505(b) and IRS Revenue Procedure 2006-24, with respect to its Form 1120-C Return, again asking that the IRS determine whether the AWC/Capstone transaction resulted in a reversion of Plan assets under IRC § 4980.
The debtors had filed Chapter 11 petitions on March 9, 2001, and their plan was confirmed on November 23, 2004.
The trustee filed a counterclaim seeking, inter alia, a refund for the 2001 tax period of March 9, 2001-December 31, 2001, based on carryforwards and carrybacks of operating losses incurred during the first quarter of 2001 and the 1999, 20 tax years.
The filing of a proof of claim by a government entity serves as a waiver of sovereign immunity as to claims by the debtor arising out of the same transaction.
The fact that sovereign immunity has been abrogated does not necessarily mean that the Court has jurisdiction to grant the requested relief, however.