United States v. Burton W. Turner, and Dorothy Turner

The United States was granted summary judgment in its action against appellants brought in May, 1976 to reduce judgment an unpaid income tax assessment made in July, 1969. The district court denied the challenge to the timeliness of the government’s action, correctly holding that under 26 U.S.C. § 6503 (b) and McAuley v. United States, 525 F.2d 1108 (9th Cir. 1975), the taxpayers’ bankruptcy had the effect of suspending the running of the six-year statute of limitations period for one year, thereby making this action timely. We affirm.

Section 6503(b) suspends the running of the six-year limitations period provided in 26 U.S.C. § 6503 (a) when “the assets of the taxpayer are in the control or custody of the court . . . and for six months thereafter.” In McAuley v. United States, supra, this court held that a bankruptcy court has custody or control of the taxpayer’s assets for purposes of section 6503(b) from the beginning of bankruptcy until six months after the first creditors’ meeting. That is, suspension lasts “until six months after the date of the first creditors’ meeting, and for an additional six months thereafter.” Id. at 1114 . Thus, under the basic holding of McAuley ,…