Mark T. Miller (the "Trustee"), the trustee of the bankruptcy estate of Ott Lynn Elliott and Sharon W. Elliott, is before the court on the Objection to Claim and Notice that he filed in the above-styled case on February 19, 2004. The objection seeks the disallowance of the claim that the Internal Revenue Service (the "IRS") filed in this case on February 17, 2004, "except to the extent it may be paid as a late claim." The proof of claim is in the amount of $957.15, and the IRS asserts that $942.93 of that sum is entitled to priority under  507(a)(8) of the Bankruptcy Code. The order for relief was entered in this case on July 3, 2003, so the deadline for filing governmental proofs of claim expired on January 29, 2004. Fed. R. Bankr. P. 3002(c)(1). The Trustee has not yet made a distribution in this case.

Section 502(b)(9) of the Bankruptcy Code provides for the disallowance of a claim when the proof of claim "is not timely filed, except to the extent tardily filed as permitted under paragraph (1), (2), or (3) of section 726(a) of this title or under the Federal Rules of Bankruptcy Procedure, except that a claim of a governmental unit shall be timely filed if it is filed before 180 days after the date of the order for relief or such later time as the Federal Rules of Bankruptcy Procedure may provide." Section 726(a)(1), in turn, requires the distribution of property of the estate--

first, in payment of claims of the kind specified in, and in the order specified in, section 507 of this title, proof of which is timely filed under section 501 of this title or tardily filed before the date on which the trustee commences distribution under this section.

Accordingly, if a proof of claim with respect to a priority claim is filed after the deadline but prior to the trustee's distribution, the claim is to be paid first under 726(a)(1) and, by virtue of that provision's incorporation into 502(b)(9), the claim may not be disallowed as untimely. Thus, as a practical matter, the deadline for filing proofs of claim with respect to priority claims is the commencement of distributions by the trustee. In the words of one bankruptcy court: "Section 726(a)(1) provides for distribution to priority creditors . . . whether or not the claim was timely filed so long as the claim is filed before the trustee commences distribution." In re Lewis, 227 B.R. 886, 890 (Bankr. W.D. Ark. 1998). (1)

For the foregoing reasons, the court will enter a separate order overruling the Trustee's objection to the extent that the IRS's claim is entitled to priority. (2) Because the court will overrule the objection on the merits, it need not address the IRS's argument that it was not properly served with the objection.

Copies to:

Mark T. Miller, Trustee

Paul J. Krazeise, Jr., Esq.

John C. Ryan, Esq.

1. The IRS relies on this court's decision in the Ashland Brokerage case. In re Ashland Brokerage Co., No. 82-10219, slip op. at 2 (Bankr. E.D. Ky. June 24, 1993) (citing IRS v. Century Boat Co. (In re Century Boat Co.), 986 F.2d 154 (6th Cir. 1993); United States v. Cardinal Mine Supply, Inc., 916 F.2d 1087, 1091 (6th Cir. 1990)). However, the 1994 amendment to  726(a)(1) supersedes the Sixth Circuit decisions upon which the court relied in that case. See In re Burnham, Connolly, Oesterle & Henry, 98 F.3d 1341 (Table), 1996 WL 580475, at **4 (6th Cir. 1996) ("We note in closing that the problem presented here will not trouble the courts much longer. The 1994 Bankruptcy Amendments . . . 'reveal[] Congress' intent to demand that claims be timely filed.' . . . Section 726(a)(1) has been modified to allow first-tier distribution status to timely filed claims and those that are 'tardily filed before the date on which the trustee commences distribution.'") (emphasis added).

2. The nonpriority portion of the claim may be paid only after the satisfaction of claims of the kind described in 726(a)(1) and (2) of the Bankruptcy Code. 11 U.S.C. 726(a)(3).