Internal Revenue Bulletin 2006-14, Revised Ruling 2006-16: Joint and Several Liability; Relief under Section 6015
This ruling discusses the issue of whether a taxpayer is precluded from raising a request for relief from joint and several liability under § 6015 by virtue of a previous chapter 7 bankruptcy case in which the IRS filed a proof of claim, but the bankruptcy court did not make an actual determination of tax liability.
Tax Changes in the 2005 Bankruptcy Code Amendments
by T. Keith Fogg
IRS – Office of Chief Counsel; Richmond, Va.
The automatic stay prevents the commencement or continuation of a tax court proceeding. In Halpern v. Commissioner, 96 T.C. 895 (1991), the court interpreted this provision very broadly to include post-petition tax periods that could not be claimed against the bankruptcy estate but were solely the debts of the post-petition individual debtor. Bankruptcy Code §362(a)(8) was amended to clarify the scope of the automatic stay. For individual debtors, the changes to the stay mean that it now does not prevent the tax court from obtaining jurisdiction over the petitions of individual taxpayers for post-petition periods. For corporate debtors, the stay operates to bar tax court jurisdiction for any taxable periods for which “the bankruptcy court may determine” the tax liability.
Income Taxes in the Year of Bankruptcy
by Gregory Germain
Syracuse University College of Law; Syracuse, N.Y.
This PowerPoint presentation covers administrative priority and eighth priority, as well as the lookback rule, 240-day rule and post-petition assessability rule, and when taxes are incurred.
Minutes from Annual Spring Meeting
The Bankruptcy Taxation Committee met on Saturday, April 22, 2006, at 9:30 a.m. during the 2006, ABI Annual Spring Meeting in Washington, D.C. Committee Chairman David H. Stein of Duane Morris LLP in Newark, N.J., introduced the panelists for the presentation: Miriam Howe, assistant division counsel with the Internal Revenue Service in Washington, D.C.; T. Keith Fogg of the Office of the Chief Counsel of the Internal Revenue Service in Richmond, Va.; Gregory Germain, an assistant professor of law at Syracuse University College of Law; and Eric Pruitt, an attorney with Baker, Donelson, Bearman Caldwell & Berkowitz, P.C. in Birmingham, Ala.
Ms. Howe discussed the IRS reorganization process and answered questions from the audience.
Mr. Fogg delivered his presentation entitled “Tax Changes in the 2005 Bankruptcy Code Amendments.” A copy of the materials is attached.
Prof. Germain led a discussion on income taxes in the year of bankruptcy (materials attached). An upcoming edition of The Tax Lawyer will include an article by Prof. Germain entitled “Income Taxes in the Year of Bankruptcy: A Congressionally-Created Quagmire.”
Mr. Pruitt briefly reviewed IRS Revenue Ruling 2006-16 and several recent cases involving the bankruptcy and taxation areas. Revenue Ruling 2006-16 provides that a bankruptcy filing by a husband and wife does not necessarily prevent one spouse from later filing for innocent spouse relief under the Internal Revenue Code. A copy of Revenue Ruling 2006-16 is above.
The next meeting of the Bankruptcy Taxation Committee is tentatively scheduled to be held at the 2006 ABI Annual Winter Leadership Conference, Nov. 30–Dec. 2, 2006, in Scottsdale, Ariz. Please email David H. Stein or call (973)424-2022 if you have any suggestions for meeting topics or if you are interested in writing a brief article for the Bankruptcy Taxation Committee’s electronic newsletter.