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bankruptcy. Federal tax liens are not extinguished by personal
discharge in bankruptcy. 11 U.S.C. sec. 522(c)(2)(B) (2000); see
also Johnson v. Home State Bank, supra at 84. Any existing
Federal tax liens remain in effect and attach to assets owned
prior to the date of filing the bankruptcy petition. 11 U.S.C.
sec. 522(c)(2)(B) (2000); In re Connor, 27 F.3d 365, 366 (9th
Cir. 1994) (“A preexisting lien on property, however, remains
enforceable against that property even after an individual’s
personal liability has been discharged.”).
When petitioner filed for bankruptcy, there was a valid and
existing Federal tax lien on her property, and notice of levy had
been served regarding at least the Merrill Lynch account. In her
bankruptcy filings, petitioner included as an asset the amount of
money that then existed in the Merrill Lynch account. The
existing Federal tax lien that attached to these funds was not
extinguished in her bankruptcy. Consequently, as of July 22,
1998, a portion of petitioner’s tax liabilities for 1986 and 1987
remained collectible, notwithstanding petitioner’s relief from
personal liability by the bankruptcy court’s discharge. As a
result, we need not address whether respondent is correct in
asserting that tax liabilities are considered paid when, if ever,
they become uncollectible.
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