3 Year Statute of Limitations Applies to IRS Assesments based on Mistatement of Basis
The statute of limitations on IRS assessment of taxpayers is normally 3 years, but the law provides a 6 years statute of limitations where the taxpayer has understated gross income by more than 25%. In United States v. Home Concreate & Supply, LLC, the IRS argued that where property basis is overtated, it is tantamount to an understatement of income, and, therefore, the 6 year statute of limitations applied. The Supreme Court found otherwise, holding the 3 year statute of limitations rather than the 6 year statute of limitations applied where the taxpayer overstated it’s original cost basis on the return. Below is a link to the case.
http://www.supremecourt.gov/opinions/11pdf/11-139.pdf
If you need help dealing with the IRS, give us a call at (404) 255-7400.
