In the Matter of Ralph W. Zook, Bankrupt. Ralph W. Zook v. United States

Zook appeals from an order of the district court reversing an order of a bankruptcy judge which enjoined the Internal Revenue Service (IRS) from collecting taxes from Zook pending the bankruptcy court’s determination of the dischargeability of, and Zook’s liability for, those taxes. The government claims that because the IRS did not file a creditor’s claim with the bankruptcy court, the doctrine of sovereign immunity deprives the bankruptcy court of jurisdiction over it. We reverse.

Zook was the treasurer and a member of the board of directors of Interstate Trophy & Photo. During late 1971 and early 1972, the corporation failed to pay to the IRS certain trust fund withholding taxes and Federal Insurance Contribution Act taxes in the amount of $7,415. On March 28, 1972, the company became an involuntary bankrupt. On July 28, 1972, the IRS notified Zook that it proposed to assess against him, as a responsible officer of the company, the amount of the foregoing taxes owed by the company.

On August 7,1972, Zook filed a voluntary petition in bankruptcy and was adjudicated a bankrupt. An Order of Discharge was issued by the bankruptcy court on March 22, 1973. The IRS did not…