- 13 -
(Bankruptcy Reform Act of 1978, Pub. L. 95-598, 92 Stat. 2549),
we held that where a bankruptcy court had decided all the issues
that were before the Tax Court and the taxes had been assessed,
the case should be dismissed for lack of "jurisdiction". In
reaching this result we relied upon Comas, Inc. v. Commissioner,
23 T.C. 8 (1954). To understand the holdings in these cases, it
is necessary to also understand the statutory context in which
they arise. Prior to the Bankruptcy Tax Act of 1980, Pub. L. 96-
589, 94 Stat. 3389, section 6871 (26 U.S.C. sec. 6871 (1976)),
provided, inter alia,
(a) Immediate Assessment.--Upon the adjudication of
bankruptcy of any taxpayer in any liquidating proceeding * *
* any deficiency * * * shall, despite the restrictions
imposed by section 6213(a) upon assessments, be immediately
assessed * * * in accordance with law.
(b) Claim Filed Despite Pendency of Tax Court
Proceeding.--In the case of a tax * * * claims for the
deficiency * * * may be presented, for adjudication * * * to
the court before which the bankruptcy * * * proceeding is
pending, despite the pendency of proceedings for the
redetermination of the deficiency in pursuance of a petition
to the Tax Court * * *. [Emphasis added.]
The result in both Valley Die Cast Corp. and Comas, Inc. was
based on the peculiarities of the old Bankruptcy Act and the pre-
1980 version of section 6871 that are summarized in 1A Collier,
Collier on Bankruptcy, par. 8.02, at 8-5 (15th ed. 1996):
Once a bankruptcy case was filed, there was no
automatic stay, and the IRS had the power to assess income
tax liabilities against the bankrupt. This concept of
immediate assessment was detrimental to the bankrupt
taxpayer because it took away the power of the Tax Court to
pass on tax issues. After immediate assessment the Tax
Court had no jurisdiction over the bankrupt's tax
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011