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The Bloomberg BNA Federal Tax Blog is a forum for practitioners and Bloomberg BNA editors to share ideas, raise issues, and network with colleagues about federal tax topics. The ideas presented here are those of individuals and Bloomberg BNA bears no responsibility for the appropriateness or accuracy of the communications between group members.

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Friday, May 11, 2012

Tax Court Dismissal of Petition Seeking Review of CDP Action

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 Does Not Violate Bankruptcy Automatic Stay

In a case of first impression, the Tax Court held that dismissal of a taxpayer’s petition seeking review of IRS collection actions under §6330(d) does not violate the bankruptcy automatic stay under 11 U.S.C. §362(a)(8). In Settles v. Comr., 138 T.C. No. 19 (5/8/12), the Tax Court concluded that granting the taxpayer’s motion to dismiss was entirely consistent with the analysis of other courts that have allowed for dismissal of cases in other contexts without violating the bankruptcy automatic stay. Noting that the purpose of §362(a)(8) was to clarify that the Tax Court no longer would exercise wholly concurrent jurisdiction with the bankruptcy court in resolving tax issues, the court determined that dismissing the taxpayer’s cases did not require that it consider any issues relating to the underlying cases and that dismissal would not constitute a continuation of the judicial proceedings as the bankruptcy court already had adjudicated the taxpayer’s tax liabilities.

Kenneth S. Savell, J.D., LL.M
IRS Practice and Procedure Group
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