About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

34 NewsQuarterly 1 (2014-2015)

handle is hein.journals/newsqtrly34 and id is 1 raw text is: POINT TO REMEMBER Fighting the Post-Bankruptcy Survival of Federal Tax Liens on Property That Is Excluded from the Bankruptcy Estate (Part 2) By Michael DeBlis* Editor's Note: This is the second of a two-part article, which provides an overview of the federal tax system's forced collections tools. Part 1 appeared in the NewsQuarterly, Vol. 33, No. 4, Summer 2014 issue. Judicial Collection Actions Although its administrative enforcement tools are at the heart of federal tax collection, the Service can seek judicial assistance to enforce a tax liability. As a practical matter, the Service seeks judicial assistance only when its administrative procedures for collecting taxes are ineffective. Because the Service employs judicial collection actions sparingly, a taxpayer is unlikely to be subject to a section 7403 action. For example, in 2010, the Service filed roughly 1.1 million NFTLs and 3.6 million notices of levy on third parties, but civil actions under section 7403 produced only 46 judicial opinions. Internal Revenue Service, Data Book 2010, Table 16 (2011), available at http://www. irs.gov/pub/irs-soi/lOdatabk.pdf; National Taxpayer Advocate, 2010 Annual Report to Congress, Executive Summary, at 43, available at http://www.irs.gov/pub/irs-pdf/ p2104c.pdf. There are two chief reasons why the Service uses judicial collection actions as a last resort. First, as section 7421 recognizes, a federal lawsuit to enforce a lien can be a potentially long and drawn out adversarial process. Second, the Service cannot, itself, bring an action in federal court to enforce the lien through foreclosure. Instead, it must persuade the Department of Justice, which has its own priorities and demands on its resources, to commence the action on behalf of the United States. I.R.C. § 7401. The purpose of a collection action is to reduce the federal tax assessment to judgment and to foreclose the tax liens on specific property. But the Service can also request more unusual relief. For example, it may obtain certain relief on an ex parte basis, including the authority to open, or at least be present at the opening of, a safety deposit box, and to obtain a warrant to enter property without the owner's consent. In re Gerwig, 461 F. Supp. 449, 451 (C.D. Cal. 1978). The Service may also attempt to set aside a conveyance as fraudulent. Such action is taken when it believes that the taxpayer transferred property prior to the federal tax lien (or levy) in order to avoid payment. I.R.C. § 6901. Generally, when a conveyance neRIis k DeRIis aw Firm RInomfieId N I continued on page 8 Point to Remember Fighting the Post-Bankruptcy Survival of Federal Tax Liens on Property That Is Excluded from the Bankruptcy Estate (Part 2) 1 From the Chair Armando Gomez Interview: Stanley S. Surrey 3 4 14th Annual Law Student 6 Tax Challenge: J.D. Problem Book Excerpt The Statute of Limitations in 12 Equitable Relief Cases Tax Bites 14 Autumn Serenade Government Submissions (1) Comments on Summary of 16 Staff Discussion Draft on Reforming Tax Administration (2) Follow-up on Funding for the 17 Internal Revenue Service (3) Boxscore 19 CLE Calendar 22 YEARS )SIoITION American Bar Assoc ation

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most