Insolvency proceedings in state court take various forms; the most frequent is an assignment for the benefit of creditors. The IRS files proofs of claim in such proceedings. If litigation arises, the Federal Insolvency Statute, 31 U.S.C. § 3713 applies. When an objection to an IRS claim is filed, the United States Attorney’s Office should notify the Chief of the appropriate Civil Trial Section prior to taking any action and should furnish all relevant pleadings and information.

[updated February 2018]