BRETT L.

TOLMAN, (8821), United States Attorney

S. MARK BARNES, (5034), Special Assistant U.S. Attorney
Attorneys for the United States of America
150 Social Hall Avenue, Suite 313A
Salt Lake City, Utah 84111-1504
Telephone:(801) 799-6623

UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF UTAH

In Re: )
)
ATLAS MARKETING GROUP, L.C. ) Bankr. No. 08-20225
) Chapter 11
Debtor. ) Judge: Judith A. Boulden
)
) [Filed Electronically]
)

MOTION TO LIFT THE STAY TO SET OFF OVERPAYMENT

UNITED STATES OF AMERICA, on behalf of the Internal Revenue

Service, moves this Court pursuant to 11 U.S.C. ' 362(d) and B.R.

4001, for an order to modify the automatic stay to allow the

Internal Revenue Service to offset pre-petition tax overpayment

for employment taxes for the quarter ended September 30, 2006

against pre-petition tax liabilities of the debtors.

IN SUPPORT THEREOF the Internal Revenue Service states:

1. Debtors filed a bankruptcy petition seeking relief under

Chapter 11 on January 15, 2008.

Filed: 03/26/08
 2. Debtor filed Form 941 (Employer’s Quarterly Federal Tax

Return) for the quarter ended September 30, 2006. Debtor attached

a check to the return in the amount of $234,422.91.

3. IRS records indicate that this was a duplicate payment.

This amount had already been paid by the debtor in the form of

deposits made by the debtor for that quarter.

4. On November 13, 2006, the IRS sent a refund check in the

amount of $234,422.91 to the debtor to refund the overpayment.

5. The debtor failed to process the refund check, which has

now been canceled and the IRS is still in possession of the

$234,422.91 overpayment.

3. The overpayment was made for the period ended September

30, 2006, and paid to the IRS before November 13, 2006, which

date is more than a year prior to the filing of the debtor’s

bankruptcy petition. Thus, the overpayment is a prepetition

overpayment.

6. The Internal Revenue Service has prepetition claims

totaling $5,476,269.35. The secured amount, which is secured by

virtue of the overpayment amount set forth above, is $234,422.91.

The priority claim is in the amount of $5,241,846.44, and there

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is no general unsecured claim asserted by the Internal Revenue

Service.

7. The Internal Revenue Service is prohibited from

offsetting the Debtor’s September 30, 2006 overpayment by 11

U.S.C. ' 362(a)(7) without an order lifting the automatic stay.

However, such an offset is permitted pursuant to section 553(a),

once the automatic stay is lifted.

8. The Internal Revenue Service has a right of set off

under 26 U.S.C. ' 6402, which right constitutes Acause@ for

relief from the automatic stay under 11 U.S.C. ' 362(d)(1). In

re Orlinski, 140 B.R. 603 (Bankr. S.D. Ga. 1991).

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 WHEREFORE, the Internal Revenue Service respectfully moves

that the automatic stay be lifted to allow the Internal Revenue

Service to apply the Debtor’s overpayment for the quarter ended

September 30, 2006 against the Internal Revenue Service’s

prepetition claims.

PAUL M. WARNER
United States Attorney

By: _/s/S. Mark Barnes______

S. MARK BARNES
Special Assistant
United States Attorney
150 Social Hall Avenue
Suite 313A
Salt Lake City, Utah 84111
Facsimile: (801) 799-6635
Telephone: (801) 799-6623

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 CERTIFICATE OF SERVICE

I hereby certify that I am an employee of the United States

Attorney's office for the District of Utah and that a copy of the
foregoing MOTION TO LIFT THE STAY TO SET OFF OVERPAYMENT was
served by electronic transmission, where indicated and by first
class mail on March 26, 2008, to the following:

Atlas Marketing Group, L.C.

P.O. Box 906
Lehi, UT 84043

Ronald S. George
Attorney for Debtor
(Received Electronically)

John T. Morgan
Attorney for United States Trustee
(Received Electronically)

Kim R. Wilson
Attorney for Creditor Committee
(Received Electronically)

All entities listed on the mailing matrix of the Court.

_/s/S. Mark Barnes

S. MARK BARNES
Special Assistant
United States Attorney

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