- 25 - V. The Discharge in Bankruptcy Issue Petitioners’ claim that the U.S. Bankruptcy Court for the Southern District of New York (the Bankruptcy Court) discharged them from their respective unpaid liabilities for 1994 and 1995 is not a challenge to the preassessment determination of the tax but, rather, is in the nature of an affirmative defense that petitioners could raise in any postassessment action to collect the unpaid portion of the assessed tax from them. See, e.g., First Natl. Bank v. Haymes, 268 N.Y.S.2d 820, 827 (City Civ. Ct. 1996), stating: “[W]here the bankrupt is sued upon a debt[,] a discharge in bankruptcy is a defense which must be affirmatively pleaded by him.” Such a defense is relevant to collection of the unpaid portion of the assessed tax and, thus, is appropriately raised under section 6330(c)(2)(A) (but not under section 6330(c)(2)(B)). VI. Standard of Review Where, upon appeal from a section 6330 determination, a challenge to the existence or amount of the taxpayer’s underlying tax liability (i.e., a challenge to the determination of the tax on which the Commissioner based his assessment) is properly before us, the taxpayer is entitled to a hearing de novo and may make a record, and we should decide that challenge in the same manner as we would redetermine a deficiency pursuant to section 6214. In most other instances where we are asked to review aPage: Previous 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 Next
Last modified: May 25, 2011