Summary of Supreme Court’s Galletti decision
Prepared by Charles F. Rosen

On March 23, 2004, the Supreme Court published its decision in United States v. Galletti (no. 02-1389). Keep in mind that this is a pure tax case and not a bankruptcy issue, though it arose from a chapter 13 case. The unanimous decision written by Justice Thomas decided the question of ". . . [W]hether the United States can collect the partnership's unpaid employment taxes from respondents in a judicial proceeding occurring more than three years after the tax return was filed but within the 10-year extension to the three-year limitations period that attached when the tax was timely assessed against the partnership." Justice Thomas at 4. Put differently as stated in the taxpayer's brief to the Court, "What steps must the Internal Revenue Service take to collect a tax liability from a general partner of that partnership?" The Court also decided the question of ". . . [W]hether the Government must make separate assessments of a single tax debt against persons or entities secondarily liable for that debt in order for [Internal Revenue Code] §6502's extended statute of limitations to apply to those persons or entities." Justice Thomas at 7.
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To read the actual opinion, click here

2004 Annual Spring Meeting

Beginning in late 2004 or early 2005, the IRS will institute a new centralized system for gathering information about newly filed bankruptcies and tax liabilities of the related debtors and will prepare and file proofs of claim from the centralized unit. Joan Patterson, the IRS task force leader for the project, will present a PowerPoint presentation to the Bankruptcy Taxation Committee at the committee's regularly scheduled meeting to be held at 8 a.m., Saturday, April 18, during the Annual Spring Meeting. We anticipate the change in producing proofs of claim to raise a substantial number of issues that will be addressed at the meeting.

Legitimate Discharge of Consumer Taxes or Tax Evasion?

The attempt to discharge consumer taxes in a bankruptcy is a controversial practice and makes for a provocative seminar topic. This panel of experts with experience in both the private and public sector will detail the state of the law on what constitutes a fraudulent return and what is a ‘willful attempt in any manner to evade or defeat the tax.’ Practical approaches and strategies will be emphasized. This concurrent session will be held Friday, April 16, during the Annual Spring Meeting.

Expert panelists include:
Charles F. Rosen, Moderator, Law Offices of A. Lavar Taylor, Santa Ana, Calif.
James R. Kelley, Neal & Harwell PLC, Nashville, Tenn.
Morgan D. King, King Bankruptcy Media, Dublin, Calif.