Tax News

CCH (cch.taxgroup.com) reports:

  The IRS did not abuse its discretion by determining that a married couple's unpaid tax liabilities were excepted from bankruptcy discharge because the wife had been convicted of attempted tax evasion and bankruptcy fraud. In addition, the IRS properly proceeded with collection of the unpaid taxes by serving jeopardy levies.

  Although the couple received a discharge and, therefore, was relieved of personal liability for the penalties and related interest for the tax years at issue, the IRS had filed tax liens before the couple filed for bankruptcy. Thus, the liens attached to certain of the couple's assets, survived the bankruptcy proceeding, and enabled the IRS to collect the penalties and interest by an action against the property. Moreover, the IRS complied with Code Sec. 6331(a) by providing notice and demand for payment of the unpaid tax liabilities before proceeding with collection by serving the jeopardy levies.

  Finally, the wife was collaterally estopped from arguing that her tax liabilities (and interest and penalties thereon) had been discharged by bankruptcy because she had been properly convicted of tax evasion under
Code Sec. 7201. In addition, the IRS did not violate any notice requirement of Code Sec. 6331 or
Code Sec. 7429 when it issued the jeopardy levy.

L. Bussell, 130 TC No. 13, Dec. 57,458

Other References:

 
Code Sec. 6330

  CCH Reference - 2008FED ¶38,184.60

 
Code Sec. 6331

  CCH Reference - 2008FED ¶38,187.51

 
Code Sec. 7201

  CCH Reference - 2008FED ¶41,308.01

 
Code Sec. 7429

  CCH Reference - 2008FED ¶41,736.24

  Tax Research Consultant

  CCH Reference - TRC IRS: 45,052

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