The City of Milwaukee failed to present evidence that the “special charges” on the debtor’s delinquent property tax bill were in the nature of property taxes entitled to priority in the debtor’s chapter 13 plan. In re Peete, No. 21-23863 (Bankr. E.D. Wisc. June 30, 2022).
When the debtor filed for bankruptcy, the City of Milwaukee filed a claim for delinquent property taxes of which it claimed $26,754.99 as an unsecured priority debt. Ninety percent of the claim, however, represented special charges consisting of delinquent municipal services, delinquent storm water account, delinquent water account, and “total other special.” Only $903.36 of the claim represented “tax principal.” Additionally, $2,242.87 of the total amount represented interest and penalties.
The debtor objected to the claim’s priority status arguing that the special charges were not property tax debt entitled to priority under section 507(a)(8)(B). He filed a chapter 13 plan consistent with that view, and the City objected to confirmation. [Read more…] about “Special Charges” Not Included in Priority Tax Debt