Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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Annotation 170.0002.075


170.0002.075 Bankruptcy—Pre-Petition Lien. Generally, a self-assessed tax liability will be "dischargeable" in a taxpayer's bankruptcy if it had been "due and payable" more than three years prior to the filing of the taxpayer's bankruptcy petition. (11 U.S.C. sections 523(a)(1)(A); 507(a)(8)(A).) However, even if a tax liability becomes dischargeable, a tax lien filed pre-petition survives a taxpayer's discharge if the lien attaches pre-petition to the property owned by the taxpayer. (In re Carlson 292 F.Supp. 778 (1968).)

Also, if a tax liability has been discharged in a taxpayer's bankruptcy proceeding, the Board may extend a pre-petition lien pursuant to Government Code section 7172(c) only if (1) the original lien attached pre-petition to property owned by the taxpayer, (2) the taxpayer continues to own the pre-petition property at the time that the lien is to be extended, and (3) the extension of the lien is restricted to the pre-petition property owned by the taxpayer. A pre-petition lien does not attach to after-acquired property when the taxpayer has received a discharge of the tax liability. (California State Board of Equalization v. Carlson (1970) 423 F.2d 715). 8/29/95.