United States v. Galletti
The Gallettis and Briguglios were general partners of a partnership that failed to pay required employment taxes. The Internal Revenue Service (IRS) assessed the unpaid taxes against the partnership. Several years later the Gallettis and Briguglios filed for bankruptcy, and in the course of the proceedings the IRS attempted to collect the partnership's unpaid taxes from the partners as individuals. The bankruptcy court and district court held that the IRS was barred from collecting the taxes because the IRS had assessed only the partnership and not the individual partners directly, and the three-year statute of limitations for assessing the individuals had run. The court of appeals affirmed, finding that although individual partners are jointly and severally liable under California law for the debts of the partnership, a judgment against a partnership cannot be satisfied using a partner's personal assets unless there is also a judgment against the partner. Since the IRS did not obtain a judgment against the individuals within the three-year statute of limitations, the court held that the IRS cannot collect the partnership's tax debts from the Gallettis' or the Briguglio's individual assets.
Question Presented:
Whether, in order to enforce the derivative liability of partners for the tax debts of their partnership, the United States must make a separate assessment of the taxes owed by the partnership
against each of the partners directly.
