                   United States Court of Appeals
                         FOR THE EIGHTH CIRCUIT
                                 ___________

                                 No. 99-1278
                                 ___________

In re: James J. Mosbrucker; Margaret   *
Mosbrucker,                            *
                                       *
                Debtors,               *
                                       *
--------------------                   *
                                       *
James J. Mosbrucker; Margaret          * On Appeal from the United
Mosbrucker,                            * States Bankruptcy Appellate
                                       * Panel for the Eighth Circuit.
                Appellants,            *
                                       * [Not to be published]
        v.                             *
                                       *
United States of America; The Farm     *
Service Agency; Internal Revenue       *
Service; James Mosset; Wayne Drewes, *
                                       *
                Appellees.             *
                                  ___________

                        Submitted: September 17, 1999
                            Filed: October 5, 1999
                                ___________

Before McMILLIAN, RICHARD S. ARNOLD, and HANSEN, Circuit Judges.
                           ___________

PER CURIAM.
       James and Margaret Mosbrucker appeal from the bankruptcy appellate panel’s
(BAP’s) affirmance of the bankruptcy court’s1 orders (1) denying their objection to a
proof of claim, (2) denying confirmation of their Chapter 12 plan, and (3) dismissing
their case. On appeal, the Mosbruckers argue, as they did below, that the penalties and
interest the IRS assessed pursuant to 26 U.S.C. § 6672, and included in its proof of
claim, are general unsecured claims dischargeable under 11 U.S.C. § 523(a)(7)(B).
After careful review of the record and the parties’ submissions, we conclude that the
bankruptcy court properly denied the Mosbruckers’ objection to the IRS’s proof of
claim: under United States v. Sotelo, 436 U.S. 268, 275 (1978), the tax liability
imposed under section 6672 for failure to pay withheld employment taxes to the IRS
is a tax, not a penalty. Therefore, the debt is entitled to priority under 11 U.S.C. §
507(a)(8)(C) and is nondischargeable. See 11 U.S.C. §§ 523(a)(1)(A), 1228(a). As
such, the liability is required to be paid in full over the life of the debtors’ Chapter 12
plan. See 11 U.S.C. § 1222(a)(2). Because the debtors were unable to propose a plan
that would provide for full payment of the tax debt to the IRS over the life of their plan,
the bankruptcy court did not err in denying confirmation and dismissing the case. See
11 U.S.C. § 1225(a)(6).

      Accordingly, we affirm.

      A true copy.

             Attest:

                     CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.




      1
       The Honorable William A. Hill, United States Bankruptcy Judge for the District
of South Dakota.
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