UNITED STATES v. GALLETTI et al.

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114 OCTOBER TERM, 2003
Syllabus
UNITED STATES v. GALLETTI et al.
certiorari to the united states court of appeals for
the ninth circuit
No. 02–1389. Argued January 12, 2004—Decided March 23, 2004
“[T]he amount of any tax imposed [by the Internal Revenue Code] shall
be assessed within three years after the return was filed.” 26 U. S. C.
§ 6501(a). If a tax is properly so assessed, the statute of limitations
for collecting it is extended by 10 years from the assessment date.
§ 6502(a). Respondents were general partners of a partnership (herein-
after Partnership) that failed to pay significant federal employment
taxes from 1992 to 1995. The Internal Revenue Service (IRS) timely
assessed the Partnership, but the taxes were never paid. Respondents
later filed for Chapter 13 bankruptcy protection, and the IRS then filed
proof of claims against them for the Partnership’s unpaid employment
taxes. Respondents objected, arguing that the timely assessment of
the Partnership did not extend the 3-year limitations period against the
general partners, who had not been separately assessed within that pe-
riod. The Bankruptcy Court and the District Court agreed and sus-
tained respondents’ objections. The Ninth Circuit affirmed, holding
that since respondents are “taxpayers” under § 7701, which defines “tax-
payer” to mean “any person subject to any internal revenue tax,” they
are also “taxpayers” under §§ 6203 and 6501. As such, the court held
that the assessment against the Partnership extended the limitations
period only with respect to the Partnership.
Held: The proper tax assessment against the Partnership suffices to ex-
tend the statute of limitations to collect the tax in a judicial proceeding
from the general partners who are liable for the payment of the Partner-
ship’s debts. Pp. 119–124.
(a) Respondents argue that a valid assessment triggering the 10-year
increase in the limitations period must name them individually, as they
are primarily liable for the tax debt. They claim, first, that they are
the relevant taxpayers under § 6203, which requires the assessment to
be made by “recording the liability of the taxpayer.” Although the
Ninth Circuit correctly concluded that an individual partner can be a
“taxpayer,” § 6203 speaks of the taxpayer’s “liability,” which indicates
that the relevant taxpayer must be determined. Here, the liability
arose from the Partnership’s failure to comply with § 3402(a)(1)’s re-
quirement that an “employer [paying] wages” deduct and withhold em-
ployment taxes. And § 3403 makes clear that the “employer” that fails

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115 Cite as: 541 U. S. 114 (2004)
Syllabus
to withhold and submit the requisite employment taxes is the “liable”
taxpayer. In this case, the Partnership is the “employer.” Second, re-
spondents claim that they are primarily liable for the tax debt because
California law makes them jointly and severally liable for the Partner-
ship’s debts. However, to be primarily liable for this debt, respondents
must show that they are the “employer.” And, under California law, a
partnership and its general partners are separate entities. Thus re-
spondents cannot argue that, for all intents and purposes, imposing a
tax directly on the Partnership is equivalent to imposing a tax directly
on the general partners, but must instead prove that the tax liability
was imposed both on the Partnership and on respondents as separate
“employers.” That respondents are jointly and severally liable for the
Partnership’s debts is irrelevant to this determination. Pp. 120–121.
(b) The Code does not require the Government to make separate as-
sessments of a single tax debt against persons or entities secondarily
liable for that debt in order for § 6502’s extended limitations period to
apply to judicial collection actions against those persons or entities. It
is clear that “assessment” refers to little more than the calculation or
recording of a tax liability, see, e. g., § 6201, and that it is the tax that
is assessed, not the taxpayer, see, e. g., § 6501. The limitations period
resulting from a proper assessment governs the time extension for en-
forcing the tax liability. United States v. Updike, 281 U. S. 489, 495.
Once a tax has been properly assessed, nothing in the Code requires the
IRS to duplicate its efforts by separately assessing the same tax against
individuals or entities who are not the actual taxpayers but are, by rea-
son of state law, liable for the taxpayer’s debt. The assessment’s con-
sequences—the extension of the limitations period for collecting the
debt—attach to the debt without reference to the special circumstances
of the secondarily liable parties. Here, the tax was properly assessed
against the Partnership, thereby extending the limitations period for
collecting the debt. The United States now timely seeks to collect that
debt in judicial proceedings against respondents. Pp. 121–124.
314 F. 3d 336, reversed and remanded.
Thomas, J., delivered the opinion for a unanimous Court.
Kent L. Jones argued the cause for the United States.
With him on the briefs were Solicitor General Olson, Assist-
ant Attorney General O’Connor, Deputy Solicitor General
Hungar, Thomas J. Clark, and Andrea R. Tebbets.

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116 UNITED STATES v. GALLETTI
Opinion of the Court
David R. Haberbush argued the cause for respondents.
With him on the brief were Joel Barry Feinberg, A. Lavar
Taylor, and Charles F. Rosen.
Justice Thomas delivered the opinion of the Court.
Section 6501(a) of the Internal Revenue Code states that,
except as otherwise provided, “the amount of any tax im-
posed by this title shall be assessed within 3 years after the
return was filed . . . and no proceeding in court without as-
sessment for the collection of such tax shall be begun after
the expiration of such period.” 26 U. S. C. § 6501(a). If a
tax is properly assessed within three years, however, the
statute of limitations for the collection of the tax is extended
by 10 years from the date of assessment. § 6502(a). We
must decide in this case whether, in order for the United
States to avail itself of the 10-year increase in the statute of
limitations for collection of a tax debt, it must assess the
taxes not only against a partnership that is directly liable for
the debt, but also against each individual partner who might
be jointly and severally liable for the debts of the partner-
ship. Under California law a partnership maintains a sepa-
rate identity from its general partners, and the partners are
only secondarily liable for the tax debts of the partnership,
as they are for any debt of the partnership. Because, in this
case, the only relevant “taxpayer” for purposes of §§ 6501–
6502 is the partnership, we hold that the proper assessment
of the tax against the partnership suffices to extend the stat-
ute of limitations for collection of the tax from the general
partners who are liable for the payment of the partnership’s
debts. The Government’s timely assessment of the tax
against the partnership was sufficient to extend the statute
of limitations to collect the tax in a judicial proceeding,
whether from the partnership itself or from those liable for
its debts.

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Opinion of the Court
I
Respondents, Abel Cosmo Galletti, Sarah Galletti, Fran-
cesco Briguglio, and Angela Briguglio, were general part-
ners of Marina Cabrillo Company (Partnership). From 1992
to 1995, the Partnership failed to pay significant federal em-
ployment tax liabilities that it had incurred. Although the
Internal Revenue Service (IRS) timely assessed those taxes
against the Partnership in 1994, 1995, and 1996, the Partner-
ship never satisfied the debt.
Respondents Abel and Sarah Galletti and respondents
Francesco and Angela Briguglio filed joint petitions for relief
under Chapter 13 of the Bankruptcy Code on October 20,
1999, and February 4, 2000, respectively. In the Gallettis’
proceedings, the IRS filed a proof of claim in the amount of
$395,179.89 for unpaid employment taxes assessed between
January 1994 and July 1995 against the Partnership. In the
Briguglios’ proceedings, the IRS filed a proof of claim in the
amount of $427,402.74. The proof of claim included secured
claims totaling $403,264.06 for unpaid employment taxes as-
sessed between January 1994 and November 1996 against
the Partnership.
Respondents objected to the claims on the ground that
they were not proven against the estates. Respondents did
not dispute that under California law they are jointly and
severally liable for the debts of the Partnership. Nor did
they dispute that the IRS had properly assessed the taxes
against the Partnership within the 3-year statute of limita-
tions, thereby extending the limitations period for collection
of the taxes by 10 years. Rather, respondents argued that
the timely assessment of the Partnership extended the stat-
ute of limitations only against the Partnership. To extend
the 3-year statute of limitations against the general part-
ners, respondents argued, the IRS had to separately assess
the general partners within the 3-year limitations period.
Because it did not, and because the 3-year limitations period

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had expired, respondents argued that the IRS could no
longer collect the debt from them. The Bankruptcy Court
and the District Court agreed and sustained respondents’
objections to the claims.
The Court of Appeals for the Ninth Circuit affirmed. The
Government argued that the Code does not require that the
individual partners be assessed within the 3-year period pre-
scribed by § 6501 and that the IRS made a valid assessment
of the taxpayer here because the Partnership is the only rel-
evant “taxpayer.” The Court of Appeals held that since re-
spondents are “taxpayers” under § 7701(a)(14), which defines
“taxpayer” to mean “any person subject to any internal reve-
nue tax,” they are also “taxpayers” under §§ 6203 and 6501.
As such, the Court of Appeals held that “[t]he assessment
against the Partnership extended the statute of limitations
only with respect to the Partnership.” 314 F. 3d 336, 340
(2002).
The Government argued in the alternative that because
respondents conceded that they were liable for the Part-
nership’s employment tax debts as a matter of California
law, the Government had a right to payment, which suf-
fices to prove a valid claim in bankruptcy. See 11 U. S. C.
§ 101(5)(A) (defining “claim” as including a “right to payment,
whether or not such right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, dis-
puted, undisputed, legal, equitable, secured, or unsecured”).
The Court of Appeals rejected this argument because, under
California law, a creditor must obtain a judgment against a
partner before holding that partner liable for the partner-
ship’s debt. Cal. Corp. Code Ann. § 16307(c) (West Supp.
2004). At the time the United States filed its proof of claim,
it had not obtained a separate judgment against respondents,
and the time for obtaining a judgment under the Internal
Revenue Code against respondents had expired.
We granted certiorari, 539 U. S. 940 (2003), and now
reverse.

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Opinion of the Court
II
Section 6501(a) of the Internal Revenue Code provides
that “the amount of any tax imposed [by the Code] shall be
assessed within 3 years after the return was filed.” 26
U. S. C. § 6501(a). “The assessment shall be made by record-
ing the liability of the taxpayer in the office of the Secretary
[of the Treasury] in accordance with rules or regulations pre-
scribed by the Secretary.” § 6203. Within 60 days of the
assessment, the Secretary is required to “give notice to each
person liable for the unpaid tax, stating the amount and de-
manding payment thereof.” § 6303(a). If the tax is prop-
erly assessed within 3 years, the limitations period for collec-
tion of the tax is extended by 10 years from the date of the
assessment. § 6502.
The dispute in this case centers on whether the United
States can collect the Partnership’s unpaid employment
taxes from respondents in a judicial proceeding occurring
more than three years after the tax return was filed but
within the 10-year extension to the 3-year limitations period
that attached when the tax was timely assessed against the
Partnership.1 Respondents insist that a valid assessment
(that is, one that would trigger the 10-year increase in the
statute of limitations) must name them individually. This is
so, according to respondents, because they are primarily lia-
ble for the tax debt, both because they are “the [relevant]
taxpayer[s]” under § 6203 and because they are jointly and
1 Because the Government is attempting to enforce the Partnership’s tax
liabilities against respondents in a judicial proceeding, we do not address
whether an assessment only against the Partnership is sufficient for the
IRS to commence administrative collection of the Partnership’s tax debts
by lien or levy against respondents’ property.
We also decline to address whether an assessment against the partner-
ship suffices to trigger liability against the partners for interest and penal-
ties without separate notice and demand to them.

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120 UNITED STATES v. GALLETTI
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severally liable for the tax debts of the Partnership.2 We
reject both arguments in turn.
A
Respondents argue, and the Court of Appeals agreed, that
each partner is primarily liable for the debt and must be
individually assessed because each partner is a separate
“taxpayer” under 26 U. S. C. § 6203. The statutory defini-
tion of “taxpayer” includes “any person subject to any inter-
nal revenue tax,” and “person” includes both “an individual”
and a “partnership,” §§ 7701(a)(14), (a)(1). The Court of Ap-
peals observed that although the Partnership is a “tax-
payer,” each individual partner is also a separate “taxpayer.”
As such, the Court of Appeals interpreted § 6203’s require-
ment that the Secretary of the Treasury record “the liability
of the taxpayer” to require a separate assessment against
each of the general partners.
Although the Court of Appeals correctly concluded that
an individual partner can be a “taxpayer,” the inquiry does
not end there. Section 6203 speaks of “the liability of the
taxpayer” (emphasis added), which indicates that the rele-
vant taxpayer must be determined. The liability in this
case arose from the Partnership’s failure to comply with
§ 3402(a)(1) of the Code, which requires “every employer
2 Respondents argue that even if we were to hold that the partners are
secondarily liable, the IRS would still be barred from collecting the taxes.
Respondents contend that if partners are not “taxpayers” under § 6203,
then their liability arises only under state law, and the state 3-year statute
of limitations therefore applies. Brief for Respondents 30–34. Respond-
ents have forfeited this argument by failing to raise it in the courts below.
Indeed, the closest respondents have come to arguing that the state limita-
tions period applies was in the Court of Appeals, when respondents ar-
gued that “under California law, any collections suit filed against a partner
to collect a partnership debt is subject to the statute limitation provision
which applies to the underlying debt of the partnership.” Appellee’s
Opening Brief in Nos. 01–55953, 01–55954 (CA9), p. 14. This argument, of
course, is contrary to respondents’ position in this Court.

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Opinion of the Court
making payment of wages” to deduct and withhold employ-
ment taxes. Moreover, “[t]he employer shall be liable for
the payment of the tax required to be deducted and with-
held.” § 3403. When an employer fails to withhold and
submit the requisite amount of employment taxes, § 3403
makes clear that the liable taxpayer is the employer. In this
case, the “employer” was the Partnership.3
B
Respondents also argue that they are primarily liable for
the Partnership’s tax debt because, under California law,
general partners are jointly and severally liable for the debts
of their partnership, Cal. Corp. Code Ann. § 16306 (West
Supp. 2004). Brief for Respondents 8–16. As our prior dis-
cussion demonstrates, however, respondents cannot show
that they are primarily liable for the payment of the Partner-
ship’s employment taxes unless they can show that they are
the “employer.” However, under California’s partnership
principles, a partnership and its general partners are sepa-
rate entities. See § 16201. Thus respondents cannot argue
that, for all intents and purposes, imposing a tax directly on
the Partnership is equivalent to imposing a tax directly on
the general partners. Respondents must instead prove that
the tax liability was imposed both on the Partnership and
respondents as separate “employers.” The fact that re-
spondents are jointly and severally liable for the debts of the
Partnership is irrelevant to this determination.
III
We now turn to the question whether the Government
must make separate assessments of a single tax debt against
persons or entities secondarily liable for that debt in order
3 Our decision is consistent with this Court’s holding in United States v.
Williams, 514 U. S. 527, 532–536 (1995), where we interpreted “taxpayer”
under 26 U. S. C. § 6511 more broadly. Here, it is clear that we must inter-
pret “the taxpayer” under § 6203 with reference to the underlying liability.

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for § 6502’s extended statute of limitations to apply to those
persons or entities.4 We hold that the Code contains no such
requirement. Respondents’ argument that they must be
separately assessed turns on a mistaken understanding of
the function and nature of an assessment as identical to the
initiation of a formal collection action against any person or
entity who might be liable for payment of a debt. In its
numerous uses throughout the Code, it is clear that the term
“assessment” refers to little more than the calculation or re-
cording of a tax liability. See, e. g., 26 U. S. C. § 6201 (assess-
ment authority); § 6203 (method of assessment); § 6204 (sup-
plemental assessments); 26 CFR § 601.103 (2003). See also
Black’s Law Dictionary 111 (7th ed. 1999) (defining “assess-
ment” as the “[d]etermination of the [tax] rate or amount of
something, such as a tax or damages”). “The Federal tax
system is basically one of self-assessment,” whereby each
taxpayer computes the tax due and then files the appropriate
form of return along with the requisite payment. 26 CFR
§ 601.103(a) (2003). In most cases, the Secretary accepts the
self-assessment and simply records the liability of the tax-
payer. Where the taxpayer fails to file the form of return
or miscalculates the tax due, as in this case, the Secretary
can assess “all taxes (including interest, additional amounts,
additions to the tax, and assessable penalties),” 26 U. S. C.
§ 6201(a), by “recording the liability of the taxpayer in the
office of the Secretary,” § 6203. In other words, where the
Secretary rejects the self-assessment of the taxpayer or dis-
covers that the taxpayer has failed to file a return, the Secre-
tary calculates the proper amount of liability and records it
in the Government’s books.
To be sure, the assessment of a tax triggers certain conse-
quences. After the amount of liability has been established
and recorded, the IRS can employ administrative enforce-
ment methods to collect the tax. §§ 6321–6327, 6331–6334.
4 We use the term “secondary liability” to mean liability that is derived
from the original or primary liability.

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Opinion of the Court
The assessment of a tax liability also extends the period dur-
ing which the Government can collect the tax. But the fact
that the act of assessment has consequences does not change
the function of the assessment: to calculate and record a
tax liability.
Under a proper understanding of the function and nature
of an assessment, it is clear that it is the tax that is assessed,
not the taxpayer. See § 6501(a) (“the amount of any tax . . .
shall be assessed”); § 6502(a) (“[w]here the assessment of any
tax”). And in United States v. Updike, 281 U. S. 489 (1930),
the Court, interpreting a predecessor to § 6502, held that the
limitations period resulting from a proper assessment gov-
erns “the extent of time for the enforcement of the tax liabil-
ity,” id., at 495. In other words, the Court held that the
statute of limitations attached to the debt as a whole. The
basis of the liability in Updike was a tax imposed on the
corporation, and the Court held that the same limitations
period applied in a suit to collect the tax from the corpora-
tion as in a suit to collect the tax from the derivatively lia-
ble transferee. Id., at 494–496. See also United States v.
Wright, 57 F. 3d 561, 563 (CA7 1995) (holding that, based on
Updike’s principle of “all-for-one, one-for-all,” the statute of
limitations governs the debt as a whole).
Once a tax has been properly assessed, nothing in the
Code requires the IRS to duplicate its efforts by separately
assessing the same tax against individuals or entities who
are not the actual taxpayers but are, by reason of state law,
liable for payment of the taxpayer’s debt. The conse-
quences of the assessment––in this case the extension of the
statute of limitations for collection of the debt––attach to the
tax debt without reference to the special circumstances of
the secondarily liable parties.
In this case, the tax was properly assessed against the
Partnership, thereby extending the statute of limitations for
collection of the debt. The United States now timely seeks
to collect that debt in judicial proceedings against respond-

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ents.5 We therefore reverse the judgment of the Court of
Appeals and remand the case for further proceedings con-
sistent with this opinion.
It is so ordered.
5 The Court of Appeals also held that the claims were barred by Califor-
nia partnership law, which requires a creditor first to obtain a judgment
against a partnership before holding the partners liable for the partner-
ship’s debt. 314 F. 3d 336, 344 (CA9 2002). When respondents filed for
bankruptcy, an automatic stay barred the Government from bringing suit
outside the Bankruptcy Court to enforce respondents’ secondary liability.
11 U. S. C. § 362(a)(1). Respondents do not dispute, however, that the ad-
judication of a disputed claim satisfies California’s requirement that there
be a “judgment against a partner.” Cal. Corp. Code Ann. § 16307(c) (West
Supp. 2004). Moreover, a claim is allowable in bankruptcy “whether or
not such right is reduced to judgment.” 11 U. S. C. § 101(5)(A).