he oil and gas industry is receiving increased attention these days. Ranging from potential increases in federal energy taxes, to environmental concerns and conservation efforts, to the stability of foreign sources of supply, these critical energy resources are very much in the public eye. -. . a g e n c y has long recognized the utility in seizing oil and gas p r o p e r t i e s . . -
The industry, however, has never lacked attention from the Internal Revenue Service. As the government's tax collector, that agency has long recognized the utility in seizing oil and gas properties or their production to satisfy unpaid taxes. But although the IRS may regard itself as omnipotent in such matters, a bankruptcy court in Texas has sternly reminded the agency that it is not.
Right To Pledge for Credit Upheld
Speaking from the heart of oil and gas country, a court recently upheld the sanctity of the property owner's right to pledge both land and its mineral production to secure credit. In rejecting the IRS's demand for a superpriority for its tax lien, the bankruptcy judge confirmed that creditors could rely upon preexisting secured interests in oil and gas properties and their production.
In that case, American National Bank v.