A Defective Tax Court Petition Can Still Toll the Assessment Statute of Limitations.

Under Section 6501(a) of the Internal Revenue Code, the IRS generally has three years to assess additional taxes after a return is filed. There are a number of exceptions, however, including when “a proceeding in respect of the deficiency is placed on the docket of the Tax Court,” in which case the statutory period is tolled “until the decision of the Tax Court becomes final” plus sixty days. I.R.C. § 6503(a)(1).

What if the petition that is filed is defective due to lack of jurisdiction? The Eleventh Circuit recently addressed this issue in Shockley v. Commissioner, 2012 U.S. App. LEXIS 14200 (11th Cir.Read More

More on Mailing: Federal Circuit Invalidates Tax Assessment Due to Lack of Proof.

Seemingly minor details can have a big financial impact: in an earlier post, I discussed a tax refund case that failed because the plaintiff could not establish timely mailing of its refund claim, a jurisdictional prerequisite. The IRS is also bound to establish mailing in certain contexts, as a recent decision by the Federal Circuit illustrates.

In Welch v. United States, 2012 U.S. App. LEXIS 10099 (Fed. Cir. May 18, 2012), the question was whether the IRS had provided sufficient proof that it had made a timely mailing of the statutory notice of deficiency. The taxpayers won a substantial tax refund because the IRS could not provide sufficient evidence.Read More

A Look at Listed Transactions and the Assessment Statute of Limitations

TEFRASection 6501(a) of the Internal Revenue Code generally provides the IRS with three years to issue an assessment to a taxpayer for additional taxes or for penalties after a return is filed. Congress created an exception, however, for “listed transactions,” providing that if a taxpayer does not disclose a listed transaction on its return, the IRS has one year to issue an assessment of additional tax or penalties beginning either when the IRS is furnished with the required disclosure or when a material advisor provides sufficient information concerning a listed transaction in response to a request by the Secretary of the Treasury.Read More