Rev. Rul. 71-31

In view of various court decisions, the Service will no longer set off non-pecuniary loss penalties and post-petition interest against funds due a bankrupt or insolvent taxpayer or estate by the United States under circumstances where such non-pecuniary loss penalties and post-petition interest would not be collectible as a claim against the bankrupt or insolvent estate. Columbia Aircraft Co. v. United States, 163 F. Supp. 932, Jobbers Credit Association, Inc. v. United States, 164 F. Supp. 22, In re Donley, 242 F. Supp. 403, In re Brewster-Raymond Co., 344 F. 2d 903.

See Revenue Ruling 68-574, C.B. 1968-2, 595, relating to the collectibility of post-petition interest and non-pecuniary loss penalties claimed against the estate of a bankrupt in proceedings under the Bankruptcy Act and in general receivership or assignment for the benefit of creditor cases.

Revenue Ruling 56-162, C.B. 1956-1, 652 is hereby revoked.