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Statute of Limitations

Quezada v. Internal Revenue Service (In re Quezada) (June 12, 2017)
The Quezadas filed under chapter 11 of the Bankruptcy Code. The IRS filed a $1,269,561 proof of claim for Quezada’s withholding tax liability. The Court first noted that if a taxpayer employs independent contractors, he or she has to either: (1) provide the contractor's TIN, (2) file Form 945 to report the backup withholding on these payments, and pay the backup withholding, or (3) obtain a complete Form 4669 from each independent contractor. According to the IRS in this case, Quezada did none of these. Quezada moved for summary judgment and asked the Court to find that the statute of limitations began running when he filed his 1040 tax return and that the time for assessing the tax liability had run. The Court determined that the statute of limitations only begins to run if the information a taxpayer files contains enough data to calculate the tax liability. The Court denied the motion for summary judgment because the information Quezada filed was not in evidence and so the Court could not tell if it contained enough information to calculate the withholding tax liability.
Quezada v. Internal Revenue Service (In re Quezada), Adv No. 16-01101, 2017 WL 2543887, at *1 (Bankr. W.D. Tex. June 12, 2017).