Howard and Everlina Washington - Page 9




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               you and there should be no liability for 1998 and                      
               therefore, no reason to file the lien.                                 
               Balancing Efficient Collection and Intrusiveness:                      
               It is necessary to balance the need to efficiently                     
               collect the outstanding liability against the taxpay-                  
               ers’ legitimate concerns that collection activity is                   
               not overly intrusive.                                                  
               In this case, you are mistaken in your belief that the                 
               1994 and 1995 liabilities were discharged.  Under                      
               bankruptcy law 11 USC Sec. 523(a)(1)(B)(ii), the debt                  
               in respect to a tax is not discharged if the return was                
               filed after two years before the date of the filing of                 
               the petition.  The returns for 1994 and 1995 were filed                
               02/03/1997.  To be dischargeable they had to be filed                  
               no later than 05/08/1996.  Therefore, by statute, they                 
               were not dischargeable.                                                
               The refund you expected for 1997 became part of the                    
               bankruptcy estate when you filed the petition for                      
               Chapter 7.  This is a liquidation of assets and pro-                   
               vides the mechanism for taking control of the property                 
               of the debtor.  You no longer had an interest in the                   
               property of the bankruptcy estate therefore you lack                   
               standing to challenge the treatment of the refund.  See                
               In re Gucci, 126 F.3d 380, 388 (2d Cir. 1997).  The                    
               disallowance of the deduction of the amount of the                     
               refund was the correct action and the liability created                
               by the disallowance is due and owing.                                  
               All legal and procedural guidelines were met prior to                  
               the filing of the NFTL.  The years in question are                     
               based on valid assessments.  The lien is considered to                 
               be the least intrusive method of protecting the Govern-                
               ment’s interest in the collection of the debt.                         
               The determination * * * to file the lien is sustained.                 
                                       OPINION                                        
               In support of their position that respondent may not proceed           
          with collection with respect to their taxable years 1994 and                
          1995, petitioners contend that the U.S. Bankruptcy Court for the            






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