HALL v. UNITED STATES ANALYSIS Case Study Example | Topics and Well Written Essays - 750 words

HALL v. UNITED STATES ANALYSIS - Case Study Example The contents of the case are of concern to the society and have a number of underlying factors that need elaboration. Lywood and Brenda Hall who were members of the same family did the case filling. The petitioners questioned the mandate of IRS on treating the income they acquired after the sale of their assets as a debt. Earlier on, the petitioners filed a case on bankruptcy as stated by chapter 12 of the state laws and granted sale of their farm property making a sale of $960,000. This sale exceeded the set value of Hall’s assets attracting capital gains duty ( Carrizales &. Schultz 2010). Chapter 12 mainly deals with issues regarding the farmer’s sale of assets to avoid bankruptcy declaration of the farmer. The laws simplify the requirements for assets sale in favor of the farmers to clear their debts. Amendment of the law was took place to allow debtors claim the Owings to government upon sale or exchange of any farm property used in farm operations. The Halls used this law to discharge the arising tax but faced objection from Internal Revenue Service (IRS) who stated that any assets sold upon filling of a petition on bankruptcy does not qualify discharging under section 1222 (Kent College of Law 2010). The first trial was at Arizona District Federal Bankruptcy Court (Kent College of Law 2010). In its ruling, the court agreed with the objection by IRS. The judges said that it was individual liability for taxation on any capital gains insisting that Chapter 12 was not a different taxable body. The petitioners opposed the ruling and; therefore, they appealed to U.S District of Arizona Court. The appeal court reasoned that the intention of Chapter 12 was to protect families from government taxation. The government finally appealed to U.S Court of appeal (Kent College of Law 2010). A ruling similar to the Federal Bankruptcy Court read stating that the Chapter did not authorize for a different taxable entity. The Halls