Did California violate the bankruptcy automatic stay by renewing notices that extended already existing pre-petition state tax liens?
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This page answers the general question as of 2002. Ask about yours and see what current California tax law says, with citations.
Plain-English summary
Renewing notices that extended already existing state tax liens did not violate the bankruptcy automatic stay under the cited exception for maintaining or continuing perfection of an interest in property.
The debtor's representative had asked California to release liens filed during the bankruptcy. The Board responded that the notices were renewals of liens already in existence, not new liens, and therefore fell within 11 U.S.C. section 362(b)(3).
The short source does not analyze whether the original liens were valid, whether renewal deadlines were met, or whether another bankruptcy order limited the exception.
Common questions
Were the notices new tax liens?
The letter said they were extensions of existing liens.
Did the Board agree to release them because they were filed during bankruptcy?
No.
Would the same result necessarily cover a newly created lien?
The source does not say that.
Citations and references
- 11 U.S.C. section 362(b)(3) — automatic-stay exception for maintaining or continuing perfection of an interest in property
Source
- Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
- Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/170-0000-all.html
- Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/170-0293.pdf
Original ruling text
170.0293
STATE OF CALIFORNIA
STATE BOARD OF EQUALIZATION
JOHAN KLEHS
First District, Hayward
450 N STREET, SACRAMENTO, CALIFORNIA
PO BOX 942879, SACRAMENTO, CALIFORNIA 94279-00XX
TELEPHONE (916) 324-2816
FAX (916) 323-3387
DEAN ANDAL
Second District, Stockton
CLAUDE PARRISH
Third District, Torrance
www.boe.ca.gov
JOHN CHIANG
Fourth District, Los Angeles
May 17, 2002
KATHLEEN CONNELL
State Controller, Sacramento
JAMES E. SPEED
Executive Director
REDACTED TEXT
Re:
REDACTED TEXT
Jointly Administered with Bankruptcy Case No. REDACTED TEXT
Dear REDACTED TEXT:
I write in response to Mr. REDACTED TEXT’s letter of May 8, 2002 regarding the renewed Notices of State Tax Lien, copies of which were sent to him by the State Board of Equalization on April 25, 2002. Since he requested that the Board communicate with him through his attorneys, I am addressing this letter to you with a copy to Mr. REDACTED TEXT. Mr. REDACTED TEXT’s letter expressed concern that the Board had filed liens against a debtor in bankruptcy and asked that the liens be released. Mr. REDACTED TEXT also called two of the Board’s employees about the matter and suggested that litigation could be expected. The Board regrets any misunderstanding on Mr. REDACTED TEXT’s part regarding these Notices, and believes that Mr. REDACTED TEXT may have overlooked the fact that they represent extensions of already existing liens. As the Board’s employee informed Mr. REDACTED TEXT during their telephone conversation, an act to maintain or continue the perfection of an interest in property is not a violation of the automatic stay. 11 U.S.C. § 362 (b)(3). Sincerely, M. Judith Nelson Senior Tax Counsel MJN:ds
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