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On November 18, 1991, respondent assessed against
petitioners for 1990 the $63,499 that petitioners reported due on
their 1990 Federal income tax return, plus penalties of $4,180
for failure to pay estimated tax and $2,339 for failure to pay
tax.
On September 28, 1994, within 3 years of the date on which
petitioners’ 1990 Federal income tax return was due (including
extensions that had been granted) but more than 2 years after
petitioners actually filed their 1990 Federal income tax return,
petitioners filed a chapter 11 bankruptcy petition, which the
bankruptcy court later converted to a chapter 7 bankruptcy
proceeding. At the time petitioners filed their bankruptcy
petition, because respondent had not yet filed an NFTL,
petitioners’ outstanding 1990 Federal income taxes represented
unsecured debt of petitioners owed to respondent. Sec. 6323.
On November 9, 1995, in petitioners’ chapter 7 bankruptcy
proceeding the first creditors’ meeting was held, and on
March 17, 1998, a bankruptcy court order was issued discharging
petitioners of certain unspecified debts.
On November 29, 2004, respondent levied against and received
petitioners’ $196 claimed 2003 California income tax refund,
mailed to petitioners notice thereof, and applied the $196
received against petitioners’ outstanding 1990 Federal income
taxes. Respondent’s levy notice explained petitioners’ right to
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Last modified: March 27, 2008