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Sales Taxes, Bank Levy DURING Chapter 7
Jeff:
Sboe is a little bit unlike other taxes. If Elmer will pitch in, we can get a much deeper understanding, but from me:
Sales tax is an excise tax. It can be discharged if the debtor did not collect the tax and convert the trust fund. i.e. those stupid sales where the company says, "We'll pay the tax." and does not collect the tax. your debtor does not collect the tax.
So ask the questions. Did you collect the tax? Did you file a return - 3 year, 2 year, 240 day rules apply.
Yes, auto stay applies to collection, even if no notice, it is an automatic stay.
But, no damages if no notice under BARF.
Sogive notice ofthe stay, demand the levy be lifted.
dennis
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Debtor owes $14K in Cal State Board of Equal for 10 year old sales taxes, for a long since closed business. She happened to "forget" to mention those to me me before we filed her otherwise uneventful Chapter 7, so the CBOE was not listed.
I get that the taxes aren't discharged per 523(a)(1)(A) which incorporates section 507(a)(8)(C)(a tax "required to be ...collected... for whatever reason for which the debtor is liable for whatever reason").
But, the case is still open and the CBOE just levied the debtor's bank account. I see nothing in 362 that makes the stay inapplicable until the case is closed or relief granted. I can't write a letter roughing up the CBOE for a violation of the stay as we didn't list them, but can't I demand that the levy be released, right away?
I don't want to write a stern or firm letter demanding just that, if there is a loophole. BTW, if anyone thinks I've got the discharge analysis wrong, chime in!
Thanks
Jeffrey B. Smith**
CURD, GALINDO & SMITH, L.L.P.
301 East Ocean Blvd. #1700
Long Beach, CA 90802
(562) 624-1177
(562) 624-1178 fax
(310) 993-6560 cellular
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