Term: 2011
Docket: 11-139
United States, Petitioner v. Home Concrete & Supply, Llc, Et Al.
- Pro
11-139 UNITED STATES V. HOME CONCRETE & SUPPLY DECISION BELOW: 634 F.3d 249 CERT. GRANTED 9/27/2011 QUESTION PRESENTED: As a general matter, the Internal Revenue Service (IRS) has three years to assess additional tax if the agency believes that the taxpayer's return has understated the amount of tax owed. 26 U.S.C. 6501(a). That period is extended to six years, however, if the taxpayer "omits from gross income an amount properly includible therein which is in excess of 25 percent of the amount of gross income stated in the [taxpayer's] return." 26 U.S.C. 6501(e)(1) (A). The questions presented are as follows: 1. Whether an understatement of gross income attributable to an overstatement of basis in sold property is an "omi[ssion] from gross income" that can trigger the extended six- year assessment period. 2. Whether a final regulation promulgated by the Department of the Treasury, which reflects the IRS's view that an understatement of gross income attributable to an overstatement of basis can trigger the extended six-year assessment period, is entitled to judicial deference. LOWER COURT CASE NUMBER: 09-2353
The U.S. Supreme Court case United States v. Home Concrete & Supply, LLC centered on the issue of tax law and limitations periods for assessment by the Internal Revenue Service (IRS). The IRS sought to extend its standard three-year period to assess additional income taxes against Home Concrete & Supply due to an overstatement of basis that resulted in underreported gross income. However, the court ruled 5-4 in favor of Home Concrete & Supply, holding that overstating a property's basis does not equate to omitting from gross income which would allow for an extended six-year assessment period as per §6501(e)(1)(A) of the Internal Revenue Code. Therefore, any understatement resulting from this overstatement was not subject to longer review or action by the IRS beyond their normal three years.
In the dissenting opinion for United States v. Home Concrete & Supply, LLC, four justices argued that the majority misinterpreted a key provision of the Internal Revenue Code (IRC). They believed that IRC Section 6501(e)(1)(A) should be interpreted to extend the statute of limitations from three years to six when more than 25% of gross income is omitted from a taxpayer's return. The dissenters contended that an overstatement of basis can lead to an understatement of gross income and thus trigger this extension. They criticized the majority for relying on Colony Inc., v Commissioner, arguing it was not applicable because it interpreted a different version of tax law and Congress had since amended relevant sections in ways which clarified their intent. The dissent also disagreed with how much deference was given by other justices towards administrative interpretations by IRS officials; they felt these interpretations were reasonable and deserved respect under Chevron U.S.A., Inc., v Natural Resources Defense Council, Inc.
