Taxpayer Win: Supreme Court Rules No Extended Limitations Period for Basis Overstatements

by Vanja Habekovic

In U.S. v. Home Concrete & Supply, LLC, the U.S. Supreme Court ruled that a basis overstatement is not an omission from income that can trigger an extended six-year statute of limitations period. The IRS was seeking an extension of the usual three year statute to assess taxes in a tax shelter case. The ruling is a significant win for taxpayers and its impact is broad as any taxpayer selling stock or rental property, for example, would have been subject to assessment for up to six years had the IRS been victorious.