People Place Auto Hand Carwash, LLC - Page 11

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          corporation).  See sec. 301.7701-3(b)(1)(i), Proced. & Admin.               
          Regs.  We infer that petitioner has made no such election and for           
          tax purposes is to be treated as a partnership.10  Such                     
          classification for tax purposes, however, has no effect on the              
          legal status of the ownership of LLC assets and provides no basis           
          for disregarding petitioner’s separate identity from the                    
          Conways’.  See Gilliam v. Speier (In re KRSM Props., LLC), 318              
          Bankr. 712, 718-719 (B.A.P. 9th Cir. 2004).  More fundamentally,            
          regardless of petitioner’s classification as a partnership for              
          Federal tax purposes, petitioner is the “employer” within the               
          meaning of section 3403; accordingly, the liability for the                 
          employment taxes is petitioner’s and not the Conways’.  See                 
          United States v. Galletti, 541 U.S. 114, 121 (2004).  Because               
          petitioner is a separate entity from the Conways, the imposition            
          of employment tax on petitioner cannot be viewed as equivalent to           
          the imposition of employment tax on its members.  See id.                   
          Accordingly, the automatic stay provision of 11 U.S.C. section              
          362(a)(8) is inapplicable to this case.                                     
               In “unusual circumstances”, a bankruptcy court may properly            
          stay a proceeding against a nonbankrupt third party, if “there is           
          such identity between debtor and the third-party defendant that             
          the debtor may be said to be the real party defendant and that a            

               10 Attached as an exhibit to respondent’s Rule 91(f) motion            
          is a Form 1065, U.S. Partnership Return of Income, which                    
          respondent alleges petitioner filed for taxable year 1999.                  





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