In Uncategorized on 07/21/2020 at 20:33

Poker players know the feeling, however well they mask it. Whether behind sunglasses or under a hoodie or baseball cap; whether they subconsciously flick their eyes down at their hole cards or their stack; whether they lift their chins like French Foreign Legionnaires on parade; whether they bully, blabber or banter, the moment has come when one must lay it down, or risk all. Face, hands, eyes, words may mask the feeling. But a sphygmomanometer would tell the story plainly.

I don’t know if Judge Albert G (“Scholar Al”) plays poker. But he does know how to call.

Marc S. Barnes & Anne M. Barnes, Docket No. 6330-19L, filed 7/21/20, drew an apt docket no. for their CDP petition from a NFTL. Marc & Anne assert that they went through Ch 13 bankruptcy, with a confirmed plan that was fully paid out. Yes, they do happen. So discharge.

IRS says no, year at issue wasn’t included in the proceeding. IRS never filed proof of claim, because the deficiency for year at issue wasn’t determined at date of filing the bankruptcy petition. There was a Tax Court case pending, that Marc & Anne ultimately lost.

But Marc & Anne riposte that they had a hearing in Bankruptcy Court last June. “Petitioners represent that, during the June … hearing, they asked the Bankruptcy Court to consider: (1) whether their 2003 liability was discharged in the bankruptcy proceeding, even though the liability had not yet been assessed; and (2) whether an injunction issued by the Bankruptcy Court bars the IRS from attempting to collect that liability. Petitioners represent that the Bankruptcy Court currently has these two questions under advisement. They ask that we defer ruling on respondent’s motion until the Bankruptcy Court has addressed those questions.” Order, at p. 2.

OK, but they had a chance to contest in Tax Court, and lost. So liability is not an issue, only abuse of discretion. But if Bankruptcy Court determined the discharge subsumed the year at issue tax debt, then sustaining the tax lien is an abuse of discretion.

But something is missing, whence the title of this blogpost.

” Petitioners allege a dispute of material fact as to whether their 2003 liability was discharged in bankruptcy and/or whether an injunction issued by the Bankruptcy Court bars further IRS collection activity for that year. Petitioners represent that they have asked the Bankruptcy Court for a ruling on these questions, but they have not produced any motion, court filing, transcript of proceedings, or other document that corroborates their representation. We will ask petitioners to supply documents that shed light on the questions (if any) currently being considered by the Bankruptcy Court. After they have supplied that information, we will ask respondent to file a reply to petitioners’ response, expressing his view as to whether (among other things) it is necessary or desirable to stay further proceedings in this case until the Bankruptcy Court has addressed these questions.” Order, at p. 3.

Marc & Anne, lay ’em down by 8/17.

Taishoff suggests that Section 7421 puts paid to the injunction of collection. And if IRS was not given notice to be present at that June hearing, how are they bound by the bankruptcy proceeding at all? Should be interesting.




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