Nita B. Leissner - Page 11

                                       - 11 -                                         
          application of $11,270.42 from the Merrill Lynch account to                 
          petitioner’s 1987 tax liability.                                            
               Respondent argues that since petitioner’s tax liabilities              
          were uncollectible due to her personal discharge in bankruptcy on           
          July 9, 1997, no portion of petitioner’s tax liabilities remained           
          unpaid as of July 22, 1998.  Petitioner argues that her personal            
          discharge in bankruptcy did not extinguish her tax liabilities.             
               The parties stipulated that a portion of petitioner’s 1986             
          income tax liability was outstanding as of July 22, 1998.  As a             
          result of our holding that the assessed lien filing fee was part            
          of petitioner’s 1987 tax liability, a portion of petitioner’s               
          1987 income tax liability was outstanding as of July 22, 1998.  A           
          discharge of personal liability in bankruptcy “extinguishes only            
          one mode of enforcing a claim -- namely, an action against the              
          debtor in personam -- while leaving intact another -- namely, an            
          action against the debtor in rem.”  Johnson v. Home State Bank,             
          501 U.S. 78, 84 (1991).  Consequently, petitioner’s bankruptcy              
          discharge did not change the fact that a portion of petitioner’s            
          tax liabilities for 1986 and 1987 remained unpaid.                          
               Assuming, for the sake of argument, that respondent is                 
          correct that tax liabilities are considered paid when, if ever,             
          they become uncollectible, we address respondent’s contention               
          that petitioner’s 1986 and 1987 tax liabilities were rendered               
          uncollectible as a result of her personal discharge in                      






Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  Next

Last modified: May 25, 2011