- 27 -
interest. 11 U.S.C. sec. 505(a) (2000); Sabath v. Commissioner,
supra.
In petitioners’ bankruptcy proceeding, respondent submitted
a proof of claim for petitioners’ unpaid income tax and
employment tax liabilities, including penalties and interest.
Petitioners, while represented by counsel, did not file an
objection to these tax liabilities. Accordingly, petitioners are
precluded from challenging their underlying liabilities,
including the penalties and interest. However, even if
petitioners had raised the issue of whether respondent’s
assessment of penalties and interest during their bankruptcy
proceeding was erroneous, to the extent that respondent has not
conceded this issue, we would sustain his assessment of penalties
and interest.
Section 6658(a) provides that “No addition to the tax shall
be made under section 6651, 6654, or 6655 for failure to make
timely payment of tax with respect to a period during which a
case is pending under title 11 of the United States Code”.
Petitioners’ bankruptcy was pending from the date they filed
their petition until their case was closed on March 30, 2006.
See Rev. Rul. 2005-9, 2005-1 C.B. 470.
Respondent admits having erroneously assessed a failure to
pay penalty with respect to petitioners’ 1997 income tax account
on October 23, 2003, while petitioners’ bankruptcy was pending.
Page: Previous 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Next
Last modified: March 27, 2008