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When Laws Collide: U.S. Attorney’s Office Addresses Tax Consequences of Paying Wages to a Bankruptcy Trustee.

The Friday, October 10, 2008, edition of The State newspaper (Columbia, South Carolina) carried an article about the possible Wells Fargo-Wachovia merger. The article stated the merger could cause “major job cuts.” In an economic downturn such as the current one, employees are going to suffer job losses. Any employment attorney will tell you that will result in more employment-related lawsuits being filed by former employees against their former employers. Any bankruptcy attorney will tell you that will result in increased bankruptcy filings. But what happens when these two areas of the law intersect? What are the consequences if a third area of the law is introduced into the mix, such as the federal tax laws? In such a three-way collision, the legal consequences can be difficult to ascertain.
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