- 28 -
Congress not to define the term “insolvent” in section 108(d)(3)
to exclude specifically such exempt assets in determining whether
a debtor is insolvent for purposes of section 108 was inten-
tional.13 We further conclude that Congress did not intend to
exclude assets exempt from the claims of creditors under applica-
ble State law from a taxpayer’s assets for purposes of determin-
ing whether the taxpayer is insolvent within the meaning of
section 108(d)(3). If Congress had intended to exclude such
exempt assets from a taxpayer’s assets in determining whether the
taxpayer is insolvent for purposes of section 108, Congress would
have so stated in section 108(d)(3). It did not.
Our conclusion that Cole v. Commissioner, 42 B.T.A. 1110
(1940), has no application in the instant case also leads to a
result that comports with the intention of Congress in enacting
13In this regard, Myron M. Sheinfeld (Mr. Sheinfeld), a
witness who testified at the Congressional hearings on H.R. 5043
as passed by the House of Representatives (House), see H.R. 5043,
96th Cong., 1st Sess. (1979), pointed out at those hearings that
the definition of “insolvent” in H.R. 5043 as passed by the House
was different from the definition of that term in title 11 and
that “the differing definitions of insolvent will, unless made
consistent, cause substantial trouble and litigation.” Hearings
on H.R. 5043 Before the Subcomm. on Select Revenue Measures of
the House Comm. on Ways and Means (Hearings on H.R. 5043), 96th
Cong., 1st Sess. 41 (1979) (statement of Myron M. Sheinfeld,
Chairman, Committee on Tax Matters, National Bankruptcy Confer-
ence). Mr. Sheinfeld recommended that Congress adopt as the
definition of the term “insolvent” in the final version of H.R.
5043 the same definition of the term “insolvent” that Congress
had adopted in sec. 101(26) of the 1978 Bankruptcy Reform Act, 11
U.S.C. sec. 101(26) (Supp. II, 1978). See Hearings on H.R. 5043,
supra at 43. Congress chose not to do so.
Page: Previous 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 NextLast modified: May 25, 2011