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fully with the requirements of Rule 331,3 by order dated May 15,
2001, the Court directed petitioner to file a proper amended
petition. On June 12, 2001, petitioner filed a proper amended
petition. In the petitions, petitioner alleges that collection
by levy is improper because his unpaid liabilities were
discharged in bankruptcy.
Discussion
The substantive issue for decision in this levy proceeding
is whether petitioner’s unpaid liabilities were discharged in
bankruptcy. Petitioner argues: (1) The taxes were discharged by
the discharge order because the order specifically states that
petitioner “is released from all dischargeable debts”; (2)
respondent is enjoined by the discharge order from collecting the
unpaid liabilities; and (3) a default judgment has occurred
because respondent did not object to the bankruptcy filing.
Petitioner also contends that the bankruptcy court is the only
court that can determine whether the unpaid liabilities were
discharged.
Respondent claims that petitioner’s unpaid liabilities are
excepted from discharge under the Bankruptcy Code. Specifically,
respondent contends that the taxes are excepted from discharge
under 11 U.S.C. sec. 523(a)(1)(B) (2000) because petitioner never
3Unless otherwise indicated, all section references are to
the Internal Revenue Code currently in effect, and all Rule
references are to the Tax Court Rules of Practice and Procedure.
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Last modified: May 25, 2011