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collection by third parties (including respondent) of most types
of claims that arose before the commencement of the bankruptcy
proceeding (including Federal income taxes) against a debtor in
bankruptcy. This temporary injunction against collection is
commonly referred to as the automatic stay.
Under Bankruptcy Code section 362(c)(1), the automatic stay
remains in effect with regard to in rem actions against property
of a debtor in bankruptcy until the property is no longer part of
a bankruptcy estate.
Also, under Bankruptcy Code section 362(c)(2), the automatic
stay remains in effect and prevents other collection efforts
against a debtor in bankruptcy until the related bankruptcy
proceeding is closed, dismissed, or until a discharge order is
issued or denied. In its discretion, a bankruptcy court may
grant to creditors earlier relief from the automatic stay.
Bankruptcy Code sec. 362(d).
Accordingly, because of the above automatic stay provided by
the Bankruptcy Code, under subsections (b) and (h) of section
6503 the 10-year collection period of limitations relating to
Federal taxes owed by a debtor in bankruptcy is suspended
generally during part or all of a bankruptcy proceeding.9
9 The collection period of limitations also is suspended
while an Appeals Office collection hearing and related litigation
such as that involved in the instant action are pending. Secs.
6320(c), 6330(e).
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Last modified: March 27, 2008