- 14 - liabilities. The bankrupt's right to invoke the jurisdiction of the bankruptcy court was available after immediate assessment of tax by the IRS, but the ruling of the bankruptcy court had a limited effect on the IRS. The IRS could proceed after the immediate assessment of the tax to collect the tax by levy and distraint on the bankrupt's property and could seize and sell assets in which the bankrupt had an interest. As the court in Abel v. Campbell, 334 F.2d 339, 341 (5th Cir. 1964), explained, the pre-1980 section 6871 was meant to take jurisdiction of a pending case from the Tax Court. once a tax claim has been asserted and allowed in a bankruptcy proceeding * * * neither the language of the Code nor the sense of the situation suggests that any of the procedure of section 6213 again becomes prerequisite to the establishment and collection of that particular tax liability. [Id. at 342, quoting Cohen v. Gross, 316 F.2d 521, 523 (3d Cir. 1963)]. This results, however, from the pre-1980 version of section 6871 and the intricacies of the Bankruptcy Act. On the other hand, the present Bankruptcy Code merely stays Tax Court proceedings while the case is processed by the bankruptcy court. See 11 U.S.C. sec. 362(a)(8), (c)(2)(C). Thereafter, the rules of res judicata are applicable as discussed infra. Furthermore, even if this Court lacked subject matter jurisdiction, that fact would not affect the suspension of the period of limitations for assessment. There was still a petition before this Court with respect to the deficiencies for 1978, 1981, and 1982. Consequently, the period of limitations under section 6503(a) was still tolled. Green Spring Dairy v. Commissioner, 208 F.2d 471 (4th Cir. 1953), affg. 18 T.C. 217Page: 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