Phelps v. United States

RESPONDENT: United States
LOCATION: Cox Broadcasting Corp

DOCKET NO.: 74-121
DECIDED BY: Burger Court (1972-1975)
LOWER COURT: United States Court of Appeals for the Seventh Circuit

CITATION: 421 US 330 (1975)
ARGUED: Apr 16, 1975
DECIDED: May 19, 1975

Dennis E. Quaid - for petitioner
Keith A.Jones -
Keith A. Jones - for respondent

Facts of the case


Media for Phelps v. United States

Audio Transcription for Oral Argument - April 16, 1975 in Phelps v. United States

Audio Transcription for Opinion Announcement - May 19, 1975 in Phelps v. United States

Warren E. Burger:

The judgment and opinion of the Court in 74-121, Phelps against the United States will be announced by Mr. Justice Brennan along with the disposition of 74-453, Van Lare against Hurley, and 74-5054, Taylor against Lavine.

William J. Brennan, Jr.:

74-121 is here from the Court of Appeals for the Seventh Circuit.

A corporate taxpayer unable to pay assessed federal taxes conveyed its assets to an assignee for the benefit of creditors.

The assignee converted the assets into cash to which the federal tax lien attached.

The United States thereupon served a notice of levy upon the assignee demanding turnover of the proceeds to pay the tax and debtors.

The taxpayer then went into bankruptcy and the receiver in bankruptcy obtained from the bankruptcy court an order upon the assignee directing the payment of the proceeds to the receiver.

The Court of Appeals for the Seventh Circuit reversed the order holding that the bankruptcy court was without jurisdiction summarily to adjudicate the adverse tax claim of the United States in that the receiver's only recourse to test that claim was by way of plenary action for refund under Section 23 of the Bankruptcy Act.

We agree with the Seventh Circuit and unanimously affirm.