The SRP liability is assessed on the Individual Master File (IMF) under Master File Tax (MFT) Account Code 35. It may be mirrored into separate SRP MFT 65 modules for each spouse. The SRP MFT 35 and/or MFT 65 liability is treated as an excise tax under 11 USC 507(a)(8)(E). Since the liability on the SRP MFT 35 and/or MFT 65 module is derived from an individual’s federal income tax return, certain information from that return is used in determining dischargeability of the SRP.
The individual SRP liability of the debtor is taken from the debtor's Form 1040 (or appropriate individual income tax return), when the debtor’s gross income reportable on Form 1040 meets the threshold requiring the debtor to file Form 1040. As such, post-petition SRP MFT 35 and/or MFT 65 liabilities are treated in the same manner as post-petition Form 1040 liabilities in Chapter 11 cases:
While collection of the post-petition SRP is not prohibited by the automatic stay, a TC 520 cc 84 will be placed on post-petition MFT 35 and/or MFT 65 modules for the debtor to prevent any inadvertent collection activity against any property of the bankruptcy estate.
Like income tax reported on the debtor’s post-petition Form 1040, the post-petition SRP MFT 35 and/or MFT 65 module is not claimable as an administrative expense on Form 6338-A(C), Request for Payment of Internal Revenue Taxes.
The post-petition SRP MFT 35 and/or MFT 65 module is non-dischargeable in the individual debtor’s Chapter 11 case.
