Supreme Court Settles the Score: Circuit Ct Split Resolved

Following up on our series regarding the hot issue of an overstatement of bases and an extended statute of limitations, the U.S. Supreme Court disposed of nine cases April 30 addressing issues the court resolved in United States v. Home Concrete, denying certiorari to the rulings which reached the same conclusion as the high court or granting certiorari—and then vacating—those which did not.

 

In Home Concrete, the Supreme Court found its 1958 ruling in Colony Inc. v. Commissioner is still controlling, therefore an overstatement of basis resulting from a taxpayer's use of a Son-of-BOSS tax shelter does not trigger the extended six-year assessment period under Section 6501(e)(1)(A).  The decision resolved a circuit split on the issue.

 

Among the cases vacated by the Supreme Court were three of the most well-known appeals court cases addressing the issue: Salman Ranch Ltd. v. Commissioner, Intermountain Insurance Service of Vail LLC v. Commissioner, and Grapevine Imports Ltd. v. United States.