The debtors, a married couple, filed Chapter 12 bankruptcy on August 7, 2010 and submitted their reorganization plan on February 8, 2011. The plan was approved with some modifications on March 18, 2011. The confirmed plan contained a provision treating federal and state tax obligations attributable to the sale of farm assets occurring post-petition in 2010 and 2011 to be "classified, treated and discharged" as unsecured claims in accordance with 11 U.S.C. Sec. 1222(a)(2)(A) with the liability computed under the "marginal" method. The debtors received a tax refund for the 2010 tax year, and asserted a refund of almost $6,000 for the 2011 tax year attributable to the sale of farm property. The IRS claimed that the debtors owed over $66,000 of tax. For the 2012 tax year, the IRS did not issue a $5,706 refund, but rather applied it to the tax liability that IRS was asserting for the 2011 tax year. In May of 2013, the IRS demanded that the debtors pay the outstanding tax liability (including interest) of over $67,000. The debtors did not pay the tax claim, but then filed a 2013 return claiming a refund of almost $7,000. The IRS applied the amount of the refund to the outstanding tax liability and demanded payment in full of the outstanding tax liability of $65,431.85. The debtors sought to have the IRS held in contempt for violation of the debtors' reorganization plan on the basis that 11 U.S.C. Sec. 1222(a)(2)(A) made the IRS claim an unsecured claim not entitled to priority and subject to discharge. The court, after determining that it had jurisdiction, determined that the reorganization plan could not bind the IRS as to the post-petition tax claims. While the law in the Eighth Circuit at the time the tax was incurred was that taxes attributable to the sale of farm assets (and IRS did not challenge that the taxes at issue were attributable to farm assets) were unsecured, non-priority claims subject to discharge, the court held that a U.S. Supreme Court opinion decided in May of 2012 had abrogated the Eighth Circuit opinion. While the Eighth Circuit opinion was still applicable law at the time of plan confirmation and when the taxes at issue were incurred, the Court held that the U.S. Supreme Court opinion controlled. The court reached this conclusion by reasoning that the U.S. Supreme Court merely clarified what 11 U.S.C. Sec. 1222(a)(2)(A) had meant all along and, thus, had retroactive application. The court said this was the case "regardless of when the Plan was confirmed." The debtor then filed a motion asking the court to reverse its prior ruling because the court incorrectly retroactively applied the U.S. Supreme Court's holding in Hall to the debtors where the reorganization plan was confirmed before Hall was decided. The court agreed with the debtor and reversed its previous ruling. The court noted that the IRS need not be a "creditor" to be bound by a debtor's Chapter 12 plan in accordance with 11 U.S.C. Sec. 1222(a)(2)(A), and the debtor's plan contained a 11 U.S.C. Sec. 1222(a)(2)(A) provision. Thus, the IRS had violated the terms of the Chapter 12 plan. However, the court did not sanction the IRS. Thus, the IRS was bound the debtor's confirmed plan and any set-off or other action taken by IRS was reversed. In re Legassick, No. 10-02202, 22015 Bankr. 2239 (Bankr. N.D. Iowa Jul. 8, 2015, rev'g., 528 B.R. 777 (Bankr. N.D. Iowa 2015).