Legal Question in Tax Law in New Mexico

Bd. of Equalization hearing (California)

Federal tax appealed and lost, pursued through ombudsman. Bankruptcy then ended federal liability but state taxes had been liened based on IRS appellate level decision. Hearing is to determine whether the state audits which had been asked for for years must now be given because the final federal tax responsibility now showed no taxes owing. RKO has been cited. Any authority re: receiving a state audit or a refund? (Audit and refund were requested within one month of federal bankruptcy acknowledgement. Any cites or ideas?


Asked on 5/25/98, 12:30 pm

1 Answer from Attorneys
WILLIAM BRANDWEIN WILLIAM A. BRANDWEIN, A PROFESSIONAL LAW CORP.

CA BOARD OF EQUALIZATION

I THINK THE QUERY NEEDS ANOTHER QUESTION TO BE TO BE ANSWERED. YOU STATE THAT THE FEDERAL TAX WAS WIPED OUT IN BANKRUPTCY. INORDER TO DO THAT THE FINAL DECISION IN THE FEDERAL CASE WOULD REQUIRE AN ASSESSMENT TO MADE MORE THAN 270 DAYS BEFORE THE FILING OF THE BANKRUPTCY OR 3 YEARS AFTER THE FILING OF THE RETURN WHICH EVER IS LONGER. THE SAME APPLIES TO THE STATE TAX. MY ADVICE IN THOSE SITUATIONS WOULD HAVE BEEN TO FILE AN AMENDED RETURN FOR THE STATE IMMEDIATELY UPON THE FINAL DETERMINATION OF THE FEDERAL CASE AND THEN WAIT THE 270 DAYS BEFORE FILING THE BANKRUPTCY. THAT WOULD HAVE DISCHARGED THE STATE TAX AS WELL. IF THAT PROCEDURE WAS NOT DONE THEN THE DEBT COULD NOT BE DISCHARGED AS 270 DAYS WOULD NOT HAVE LAPSED AFTER THE LAST ASSESSMENT.

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Answered on 7/21/98, 12:36 pm


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