The U.S. Supreme Court case Harry P. Begier, Jr., Etc. v. Internal Revenue Service (1989) centered on the issue of whether certain payments made by a debtor to the IRS could be recovered as preferential transfers under Section 547(b) of the Bankruptcy Code or were exempted from recovery because they constituted "trust fund" taxes under Section 7501(a). The court held that such payments are not recoverable as preferences since they fall within an exception in section 547(c)(2), which allows for payment of debts incurred in ordinary business transactions if made according to standard business terms and within forty-five days after debt was incurred. Begier had argued that these funds should be returned to his company's bankruptcy estate, but the court disagreed, ruling instead in favor of the IRS. This decision clarified how tax-related issues should be handled during bankruptcy proceedings and established important precedents regarding trust fund taxes and their treatment under federal law.

In the dissenting opinion for the case of Harry P. Begier, Jr., Etc. v. Internal Revenue Service, Justice Blackmun argued that the majority's interpretation of "property" under Section 547(b) was too broad and inconsistent with Congress' intent in drafting this provision of the Bankruptcy Code. He contended that tax payments made by debtor corporations from funds held in trust for a third party should not be considered property of the debtor subject to preferential transfer rules because these funds were never truly part of their estate to begin with; they belonged to another entity (the IRS). In his view, allowing such transfers to be clawed back would unjustly enrich bankruptcy estates at expense of innocent creditors like IRS who had no control over timing or manner in which debtors chose to pay their taxes.