In Re Jack B. King Paula H. King, Debtors. Jack B. King Paula H. King v. Franchise Tax Board of the State of California

This case poses the question when California “assesses” an income tax deficiency, for purposes of rendering the assessment nondischargeable in bankruptcy. See 11 U.S.C. §§ 507 (a)(7)(A)(ii), 523(a)(1)(A). Jack and Paula King appeal the bankruptcy appellate panel’s decision that assessment occurs when a notice of proposed deficiency assessment becomes final. Franchise Tax Bd. v. King (In re King), 122 B.R. 383 (Bankr.9th Cir.1991). We have jurisdiction over the bankruptcy appellate panel’s final order, 28 U.S.C. § 158 (d), and we affirm.

I

Taxes measured by income or gross receipts that are assessed within 240 days of the filing of a bankruptcy petition are non-dischargeable in bankruptcy. 11 U.S.C. §§ 507 (a)(7)(A)(ii), 523(a)(1)(A). The Franchise Tax Board (the Board) mailed Notices of Proposed Additional Tax (NPATs) to the Kings more than 240 days before the Kings filed their Chapter 7 bankruptcy petition. The date on which those notices became final was within 240 days of the date on which the Kings filed for bankruptcy.

II

We review de novo issues of statutory interpretation. Trustees of the Amalgamated Ins. Fund v. Geltman Indus., 784 F.2d 926 , 929 (9th Cir.1986).

“The…