Chapter 12 of the Bankruptcy Code is used by financially distressed farmers to reorganize and remain in business.
In 2005, Congress amended a key provision to allow farmers to have more control over tax debts caused by the sale of assets that may be necessary for successful reorganization. The intention was to simplify a bankruptcy court's approval of a farmer's reorganization plan and to allow the reorganizing farmer to hold on to more cash in the reorganization process by reducing the priority status of tax debts.
However, the Supreme Court has confirmed that the Congressional amendment, as drafted, could not accomplish its helpful goals to farmers because of language that did not comport with existing bankruptcy law.
Continue reading at: Supreme Court denies financially distressed farmers tax relief .