The Supreme Court case United States v. Thomas R. Noland, Trustee for Debtor First Truck Lines, Inc., 1995 revolved around the issue of whether post-petition interest on an unsecured tax claim by a federal agency is allowable in bankruptcy proceedings under Chapter 11 of the Bankruptcy Code. The debtor was First Truck Lines and its trustee was Thomas R. Noland who argued against allowing such interest to be claimed by the IRS (Internal Revenue Service). However, the court ruled in favor of the United States government stating that while unsecured creditors generally do not receive post-petition interest under Chapter 11 bankruptcy cases, this does not apply to governmental units like IRS due to their special status as sovereign entities which are exempted from general rules applicable to private creditors.

The dissenting opinion in the United States v. Thomas R. Noland case argued that the majority's decision was inconsistent with both the language and purpose of Bankruptcy Code § 507(a)(7). The dissent believed that Congress intended to give priority status only to those tax penalties related to pecuniary loss, not punitive ones like those at issue in this case. They contended that by giving priority status to such penalties, it would unfairly disadvantage other creditors who are also seeking repayment from a debtor’s limited assets during bankruptcy proceedings. Furthermore, they disagreed with the majority's interpretation of "compensation for actual pecuniary loss," arguing instead that it should be read more narrowly so as not include punitive damages or fines designed primarily for deterrence or retribution rather than compensation.