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Petitioners also contend that their bankruptcy constituted a
no-asset bankruptcy and that, even if section 6503(h)(2)
generally were to control the collection period of limitations in
the context of a bankruptcy proceeding, under McAuley v. United
States, supra, the period of limitations should not be suspended
in a no-asset bankruptcy.
In McAuley, the Court of Appeals for the Ninth Circuit did
suggest in dicta and in a footnote that if a bankruptcy estate
contained no assets, the collection period of limitations during
a bankruptcy proceeding might not be suspended at all. Id. at
1114 n.7.
In United States v. Turner, 625 F.2d 328 (9th Cir. 1980),
the taxpayers relied on the above-cited footnote in McAuley and
argued that the collection period of limitations was not
suspended during their bankruptcy proceeding because their
bankruptcy estate consisted solely of exempt assets. In holding
for the United States, the Court of Appeals for the Ninth Circuit
in Turner clarified that the referenced footnote in McAuley
referred only to a bankruptcy without any assets, exempt or
nonexempt. United States v. Turner, supra at 329.
15(...continued)
6503(h) might be treated as the controlling provision and limit a
suspension of the collection period of limitations under sec.
6503(b).
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