Flora v. United States
Encyclopedia
Flora v. United States, 357 U.S. 63 (1958), aff'd on rehearing, 362 U.S. 145 (1960), was a case in which the United States Supreme Court
held that a taxpayer generally must pay the full amount of an income tax deficiency assessed by the Commissioner of Internal Revenue before he may challenge its correctness by a suit in a federal district court for refund under 28 U.S.C. § 1346(a)(1). The Supreme Court agreed with the Commissioner
, stating that the "full payment rule" requires that the entire amount of an asserted deficiency be paid before a refund suit may be maintained.
, or (B) in a bankruptcy case, a determination under section 505(a) of the U.S. Bankruptcy Code
. The Flora full payment rule can be a problem for a taxpayer who lets the 90-day period (following the issuance of a statutory notice of deficiency, during which he or she may file a Tax Court petition) expire and then cannot fully pay, due to insufficient assets, because the assets were seized or voluntarily liquidated for payment.
Supreme Court of the United States
The Supreme Court of the United States is the highest court in the United States. It has ultimate appellate jurisdiction over all state and federal courts, and original jurisdiction over a small range of cases...
held that a taxpayer generally must pay the full amount of an income tax deficiency assessed by the Commissioner of Internal Revenue before he may challenge its correctness by a suit in a federal district court for refund under 28 U.S.C. § 1346(a)(1). The Supreme Court agreed with the Commissioner
Commissioner of Internal Revenue
The Commissioner of Internal Revenue is the head of the Internal Revenue Service , a bureau within the United States Department of the Treasury.The office of Commissioner was created by Congress by the Revenue Act of 1862...
, stating that the "full payment rule" requires that the entire amount of an asserted deficiency be paid before a refund suit may be maintained.
Importance
If the taxpayer chooses to pay less than the deficiency asserted, the taxpayer's only remedies are (A) a deficiency proceeding in the Tax CourtUnited States Tax Court
The United States Tax Court is a federal trial court of record established by Congress under Article I of the U.S. Constitution, section 8 of which provides that the Congress has the power to "constitute Tribunals inferior to the supreme Court"...
, or (B) in a bankruptcy case, a determination under section 505(a) of the U.S. Bankruptcy Code
Title 11 of the United States Code
Title 11 of the United States Code is the primary source of bankruptcy law in the United States Code.-Contents:Title 11 is subdivided into nine chapters. It used to include more chapters, but some of them have since been repealed in their entirety...
. The Flora full payment rule can be a problem for a taxpayer who lets the 90-day period (following the issuance of a statutory notice of deficiency, during which he or she may file a Tax Court petition) expire and then cannot fully pay, due to insufficient assets, because the assets were seized or voluntarily liquidated for payment.
See also
- Chief Justice WarrenEarl WarrenEarl Warren was the 14th Chief Justice of the United States.He is known for the sweeping decisions of the Warren Court, which ended school segregation and transformed many areas of American law, especially regarding the rights of the accused, ending public-school-sponsored prayer, and requiring...
- List of United States Supreme Court cases, volume 357