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Senators Reintroduce Bill Aiming to Provide Relief in Family Farm Bankruptcies - ABI

Senate Judiciary Committee Chairman Chuck Grassley (R-Iowa) and Sen. Al Franken (D-Minn.) have reintroduced legislation that corrects a Supreme Court ruling (Hall v. United States) that they said made it harder for family farmers to reorganize their finances when falling on hard times, according to a press release on Friday. Grassley and Franken’s “Family Farmer Bankruptcy Clarification Act of 2017” remedies the May 2012 Supreme Court ruling that said amendments made to the Bankruptcy Code in 2005, which restricted the Internal Revenues Service’s veto power over a family farmer’s ability to reorganize in bankruptcy in certain situations, unfortunately failed to achieve Congress’s express goal of helping family farmers. The Family Farmer Bankruptcy Clarification Act clarifies that bankrupt family farmers reorganizing their debts are able to treat capital gains taxes owed to a governmental unit, arising from the sale of farm assets during a bankruptcy, as general unsecured claims. It also removes the Internal Revenue Service’s veto power over a bankruptcy reorganization plan’s confirmation, giving the family farmer a chance to reorganize successfully.

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