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Applying the above McAuley interpretation of section 6503(b)
to petitioners’ outstanding 1990 Federal income taxes, as
petitioners herein request us to do, the collection period of
limitations relating to petitioners’ outstanding 1990 Federal
income taxes was suspended for approximately 3 years--from the
date petitioners filed their bankruptcy petition on September 28,
1994, to a date 1 year after the November 9, 1995, first
creditors’ meeting, or until November 9, 1996. In other words,
the automatic stay under Bankruptcy Code sec. 362(a) would end
6 months after the November 9, 1995, first creditors’ meeting was
held, and the section 6503(b) suspension on the collection period
of limitations would end 6 months thereafter. Thus, under the
McAuley interpretation of section 6503(b), petitioners’
outstanding 1990 Federal income taxes would be uncollectible
(i.e., the 10-year collection period of limitations would have
expired long before respondent’s 2005 NFTL and petitioners’
subsequent request for an Appeals Office collection hearing).
However, section 6503(h)(2) provides more specifically that
the 10-year collection period of limitations on Federal income
10(...continued)
(under sec. 6503(b) assets were deemed to be in control of the
bankruptcy court until the date of discharge); United States v.
Levasseur, 45 AFTR 2d 80-1507, 1512-1513, 80-1 USTC par. 9349 (D.
Vt. 1980) (under sec. 6503(b) assets were deemed to be in control
of the bankruptcy court until the date of discharge); United
States v. Malkin, 317 F. Supp. 612, 616-617 (E.D.N.Y. 1970)
(under sec. 6503(b) assets were deemed to be in control of the
bankruptcy court until the bankruptcy proceeding is closed).
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