This item describes some of the unusual situations that arise under federal income tax statutes of limitation.
Statute of Limitation
By exercising its setoff authority, the IRS has been able to achieve the same limitation period in Form 1120X carryback situations as in tentative refund cases with Form 1139.
The Fourth Circuit overturned a Tax Court decision and upheld a Treasury regulation that sets a two-year statute of limitation on claims for innocent spouse relief.
If the IRS does not refund the correct interest, what is the statute of limitation for a claim for additional interest? What is statute of limitation for a claim for refund for interest netting and how long the IRS has to assess the correct amount of deficiency interest? The answers to these questions may surprise even experienced tax professionals.
Reversing the Tax Court, the Seventh Circuit held that the two-year limitation period for filing an equitable innocent spouse claim under Sec. 6015(f) in Regs. Sec. 1.6015-5(b)(1) was valid.
A recent case illustrates that courts may sustain the government when it makes adjustments to closed years only to determine whether an overpayment of tax exists, and not to recover additional taxes beyond the limitation period on assessment.
In Blak Investments, the Tax Court applied Sec. 6501(c)(10) to extend the assessment statute of limitation for a taxpayer with an undisclosed listed transaction on a return due prior to October 22, 2004.
With the introduction of the five-year net operating loss (NOL) carryback in Sec. 172(h) as part of the Worker, Homeownership, and Business Assistance Act of 2009, taxpayers should consider the impact that carrying back an NOL has on the assessment statute of limitation.
Definition of Omission from Gross Income for Partnership Items and the Six-Year Period for Assessing Tax
The IRS has issued temporary and proposed regulations defining an omission from gross income for purposes of the six-year minimum period for assessment of tax attributable to partnership items and the six-year period for assessing tax.
Sec. 6501(c) allows the IRS and a taxpayer to consent in writing to extend the statute of limitation to assess tax.
Editor: John L. Miller, CPA The general statute of limitations (SOL) for assessment found in Sec. 6501 gives the IRS three years to assess tax after a return has been filed, beginning on the date that a valid Federal tax return is deemed filed. A return filed prior to the