SeeI.R.C. § 932(a).Under I.R.C. § 6501(a), the period for assessing tax runs until "3 years after the return was filed." In this context, "the term 'return' means the return required to be filed by the taxpayer."

Return-related penalties must be included in an examination report.Related Statute for Assessment—The IRS takes the position that IRC section 6501(c)(8) extends the statute for assessment on the related income tax return regarding items related to the information required to be reported until 3 years after the information required by IRC 6038, IRC 6038A, IRC 6038B, IRC 6038D, IRC 6046, IRC 6046A, and IRC 6048 is furnished to the IRS. Thus, failing to file information returns may affect the statute for assessment on the related income tax return.

Also, it must be filed along with the taxpayer’s April 15 annual federal return deadline.[4] IRC §6501(a).[5] IRC §6501(e)(1)(A).

The IRS then uses that information (in conjunction with information obtained from other sources regarding whether any of the ALE’s full-time employees obtained a PTC or CSR for health coverage purchased on an Exchange) to determine if the ALE owes an ESRP. If the IRS believes an ESRP is due, it will initiate the assessment process by issuing Letter 226J[1] to inform the ALE of the proposed ESRP.Under IRC 6501, the IRS generally has three years from the date a return is filed to assess any tax in connection with that return. However, because an ESRP is not reported on a self-assessing return like most excise taxes and is triggered by a combination of events not all of which are reported on Forms 1094-C and 1095-C, it is not clear whether filing those forms is sufficient to trigger the three-year statute of limitations under IRC 6501.

There are, however, several exceptions to this rule that extend the statute of limitations. Relevantly to this memorandum, IRC § 6501(e)(1)(C) provides a six-year statute of limitations if a taxpayer omits amounts that must be included in income under the Subpart F rules.Courts have found that, based on the statutory language, some of the extended limitation periods described in IRC § 6501 apply to the entire return while others only apply to the specific item of omitted income. In a 1994 case called Colestock, the Tax Court analyzed whether the extended limitation period under IRC § 6501(e)(1)(A) applied to the entire return.

that are tantamount to dominion and control over such property, the Code ‘looks through’ the trust form and deems such grantor or other person to be the owner of the trust property and attributes the trust income to such person.” Estate of O’Connor v. Commissioner, 69 T.C. 165, 174 (1977); see alsoI.R.C. § 671. A person other than the grantor shall be treated as the owner of any portion of a trust with respect to which that person has a power exercisable solely by himself to vest the corpus or the income therefrom in himself. I.R.C. § 678(a)(1).Statute of Limitations. Section 6501(a) provides that any tax imposed under the Code shall be assessed within three years after the return was filed (whether or not the return was filed on or after the date prescribed) and no proceeding in court without assessment for the collection of the tax shall be begun after the expiration of that period. For a timely filed return, the three-year period begins to run as of the due date of the return. See I.R.C. § 6501(b). Subsection (c) provides for a number of exceptions to the general three-year period of limitations rule found in section 6501(a). One exception is in subsection (c)(8), entitled “Failure to notify Secretary of certain foreign transfers.”. Section 6501(c)(8) provides as follows:In the case of any information which is required to be reported to the Secretary under section 6038, 6038A, 6038B, 6046, 6046A, or 6048, the time for assessment of any tax imposed by this title with respect to any event or period to which such information relates shall not expire before the date which is 3 years after the date on which the Secretary is furnished the information required to be reported under such section.Statutory Reporting Obligations of U.S. Owner/Beneficiary of Foreign Trust. Section 6048(b), entitled “United States Owner of foreign trust,” provides that each United States person treated as the owner of any portion of a foreign trust shall be responsible to ensure that (A) the trust makes a r

Therefore, the Court sustained the deficiencies to the extent they are not barred by the period of limitations.Analyzing limitations, the Court first found that, for 2009 and 2010, the taxpayer filed no return. Therefore, pursuant to I.R.C. § 6501(c)(3), the tax for those years can be assessed at any time.For tax years 2007 and 2008, the Court found that the taxpayer omitted more than 25% of the gross income stated in the return, and therefore, the 6-year statute of limitations applied pursuant to I.R.C. § 6501(e).Looking at 2006, the Court first found that the 6-year statute of limitations applied and that it would normally have expired on August 21, 2013 – prior to the IRS assessment. However, applying § 7609(e)(1), the Court found that the limitations period was suspended during the 330 days in which the taxpayer had litigated motions to quash the IRS summonses to his banks.

The recent U.S. Supreme Court decision in United States v. Home Concrete & Supply, LLC, Sup. Ct. No. 11-139 (Apr. 25, 2012) is a victory for taxpayers on the statute of limitations for federal tax assessments. The Supreme Court held that an overstatement of basis is not an omission of gross income under 26 U.S.C. 6501(e)(1)(A) that extends the statute of limitations for the Commissioner to assess a tax deficiency from three years to six years. The case also provides important guidance to tax professionals about how to interpret the Internal Revenue Code.

nt when there is no genuine dispute as to any material fact and a decision may be rendered as a matter of law. Rule 121(a)(2). The moving party bears the burden of showing that there is no genuine dispute as to any material fact. When a motion for summary judgment is properly made and supported, an opposing party may not rest on mere allegations or denials. Rule 121(d). Rather, the party’s response, by affidavits or declarations, or as otherwise provided in Rule 121, must set forth specific facts showing there is a genuine factual dispute for trial. Rule 121(c) and (d). In deciding whether to grant summary judgment, the Court view the facts and make inferences in the light most favorable to the nonmoving party. IRC Sec. 6901(a)(1)(A)(i). Taxpayer’s other arguments, not addressed in this post, were as follows: the IRS was collaterally estopped from recasting the transaction, and the IRS should be judicially estopped from recasting the transaction. See Tax Court Rule 39. IRC Serc. 6501. IRC Sec. 6501(n)(2) and Sec. 6229. IRC Sec. 6229(a). Where IRC Sec. 6501(a) and Sec. 6229(a) both apply, the longer of the two periods controls. This is in the case of an initial transferee. In the case of a transferee of a transferee, the tax must generally be assessed “within 1 year after the expiration of the period of limitation for assessment against the preceding transferee, but not more than 3 years after the expiration of the period of limitation for assessment against the initial transferor.” IRC Sec. 6901(c)(1) and (2).[View source.]

the property pursuant to IRC Section 1014(a) resulting in a lower income tax liability upon the subsequent disposition of the property. IRC Section 1014(f) provides that the inherited property may not exceed the value of the property as finally determined for Federal estate tax purposes.The final value of property for federal estate tax purposes (i.e., the inherited basis of the property received by the recipient pursuant to IRC 1014(a)) pursuant to IRC Section 1014(f)(3) and Prop. Regs. Sec. 1.1014-10(c) is (i) the value reported on a filed federal estate tax return, which is not contested by the Internal Revenue Service (“IRS”) before the limitation period on assessment expires, (ii) the value determined by the IRS, which is not timely contested by the estate, or (iii) the value determined by a court or pursuant to a settlement agreement binding on all parties. The general period of time for assessing an estate tax is three years from the due date of an estate tax return pursuant to IRC Section 6501(a), but an extended six-year period may apply pursuant to IRC Section 6501(e)(2) if there is an omission of 25 percent or more of the gross estate. There is no statute of limitation on the period for assessment in the case where no estate tax return is filed.The zero-basis issue arises when property is discovered after filing of the estate tax return or is otherwise omitted from the estate tax return, as well as in the case where a required estate tax return is not filed. It is important to note that the consistent basis rules only apply to property whose inclusion in the gross estate would result in estate tax liability or would result in an increase in estate tax liability. If the after-discovered or omitted property would have resulted in estate tax liability or an increase in estate tax liability had such asset been reported, paragraph (A) or (B) of Prop. Regs. Sec. 1.1014-10(c)(3)(i) prescribes the final value of the property as follows: (A) if the after-discovered or omitted proper