Supreme Court Urged to Back IRS in Bankruptcy Trustee Battle (1)

A government lawyer argued to the US Supreme Court that state and federal laws don’t allow a bankruptcy trustee to claw back a potentially fraudulent payment made to the Internal Revenue Service.

The arguments came Monday in a case that tasks the Supreme Court justices with answering whether a bankruptcy trustee can void a debtor’s tax payment to the IRS when no creditor could have obtained the same relief under state fraudulent-transfer laws outside of bankruptcy.

Yaira Dubin, assistant to the Solicitor General, urged the court during oral arguments in United States v. Miller to consider what Congress would have ...