In the case of Badaracco et al. v. Commissioner of Internal Revenue (1983), the U.S Supreme Court ruled in favor of the IRS, upholding that a six-year statute of limitations applies when taxpayers understate their income by more than 25%. The court held that fraudulent intent is not necessary to trigger this extended period for tax assessment and collection. This decision came after Joseph and Mary Badaracco filed amended returns admitting they had understated their taxable income due to fraud but argued that since they voluntarily disclosed this information, it should be treated as an honest mistake rather than fraud, thus subjecting them only to a three-year limitation period instead of six years. However, the court disagreed with their interpretation stating that Congress intended for longer periods where substantial amounts are involved regardless if there was fraudulent intent or not.

In the dissenting opinion for Badaracco et al. v. Commissioner of Internal Revenue, Justice Harry Blackmun argued that the majority's interpretation of Section 6501(e)(1)(A) was incorrect and inconsistent with its legislative history. He contended that Congress intended to provide a longer statute of limitations period only when taxpayers substantially understated their gross income in an attempt to evade taxes, not merely due to errors or omissions on tax returns. Furthermore, he disagreed with the majority's view that fraudulent intent is irrelevant in determining whether this provision applies; instead, he believed it should be considered as part of assessing if there has been a substantial omission from gross income. The justice also criticized the majority’s reliance on Colony Inc., v Commissioner (1956), arguing that it did not apply because it dealt with different statutory language and context.