In Re Technical Knockout Graphics, Inc.

833 F.2d 797 60 A.F.T.R.2d 87 -6084, 56 USLW 2337 , 87-2 USTC P 9645, 17 Collier Bankr.Cas.2d 1246 , Bankr. L. Rep. P 72,123 In re TECHNICAL KNOCKOUT GRAPHICS, INC., a California corporation, Debtor. UNITED STATES of America, Appellant, v. TECHNICAL KNOCKOUT GRAPHICS, INC., a California corporation, Appellee. No. 87-5516. United States Court of Appeals, Ninth Circuit. Argued and Submitted Aug. 4, 1987. Decided Nov. 30, 1987. Gary D. Gray, Asst. Atty. Gen., Tax Div., Washington, D.C., for appellant. Philip D. Dapeer, George & Dapeer, Los Angeles, Cal., for appellee. Appeal from the Judgment of the Bankruptcy Appellate Panel for the Ninth Circuit. Before WALLACE, HALL and LEAVY, Circuit Judges. LEAVY, Circuit Judge: 1 The United States appeals from an order of the bankruptcy appellate panel, upholding a bankruptcy court decision that permitted the debtor to designate how any payments it made after filing a petition for reorganization under Chapter 11 of the Bankruptcy Code would be used to pay off various federal taxes it owed, 68 B.R. 463 . 2 The question presented on appeal is whether a corporate debtor under a Chapter 11 reorganization can designate that tax payments made…