William O. Douglas

“ We think the statutory policy of subordinating taxes to costs and expenses of administration would not be served by creating or enforcing trusts which eat up an estate, leaving little or nothing for creditors and court officers whose goods and services created the assets. In Nicholas v. United States, 384 U.S. 678, 690-692, 86 S.Ct. 1674, 1683-1684, 16 L.Ed.2d 853, we rejected the claim of the United States that under § 7501 (a) of the Internal Revenue Code it was entitled to interest accruing after the arrangement under Chapter XI and during the bankruptcy. ”

“ What we decide today is also in accord with those decisions which hold that the specific priorities granted by Congress in the Bankruptcy Act govern generalized statutes giving the United States priority in a wide range of situations. ”

“ The United States relies for its priority on 26 U.S.C. § 7501 (a) which provides:
'Whenever any person is required to collect or withhold any internal revenue tax from any other person and to pay over such tax to the United States, the amount of tax so collected or withheld shall be held to be a special fund in trust for the United States. ”