Current through Register Vol. 54, No. 45, November 9, 2024
Section 119.3 - Bankruptcy or receivership(a)Assessment. Upon the adjudication of bankruptcy of a taxpayer in a bankruptcy proceeding or the appointment of a receiver for a taxpayer in receivership proceeding before court, the Department will immediately assess and proceed to collect tax due or estimated to be due together with interest, penalties and additions. The Department may determine the amount of the tax due by means of information available to it. The Department will cause an investigation to be made of the taxpayer's books and records to assist it in processing its claims.(b)Proof of claim. Promptly after ascertaining the existence of a tax due or estimated to be due by a taxpayer in a proceeding under 11 U.S.C. §§ 101 - 151326, known as the Federal Bankruptcy Act or in a receivership proceeding, the Department will file proof of claim covering the tax in accordance with law in the court in which the proceeding is pending. At the same time the proof of claim is filed with the bankruptcy or receivership court, the Department will send notice and demand for payment to the taxpayer together with a copy of the proof of claim.(c)Preexisting appeals. A petition for reassessment or an appeal therefrom which has not been adjudicated prior to the date of initiation of bankruptcy or receivership proceeding may in no way affect the rights of the Department to proceed under this section.(d)Application of funds. Amounts received from the distribution of assets by the court shall be applied in extinguishment of the tax together with interest, penalties and additions due. The amounts first received shall be applied to the oldest amounts unpaid in chronological order.