On April 25, the IRS received a message from the Supreme Court that the department isn’t used to hearing: “no, you can’t do that!”
Specifically, the Supreme Court ruled that the IRS could not extend the statute of limitations related to a certain “tax shelter” that many businesses and individuals pursued.
The statute of limitations is three years for most tax returns. This means that, once three years have passed, the IRS can no longer audit and penalize a given return. But the IRS saw fit to extend this statute of limitations to six years in order to collect more money from taxpayers. As Reuters reports:
Ruling in favor of Home Concrete & Supply LLC, the business the IRS had been pursuing in a crackdown on “Son of Boss” tax shelters, the high court said the agency could not use an extended, six-year statute of limitations period.
The IRS had said the extended period, an exception from the normal three-year limit, was justified in the case.
But the court disagreed with the tax-collecting agency in a 5-4 decision in United States v. Home Concrete & Supply LLC.
The ruling puts in question up to $1 billion in tax revenues that the IRS was hoping to collect from about 30 related cases involving “Son of Boss” tax shelters.
Some would argue that many of the “tax shelters” that exist in our complicated tax code are unfair. But whether you agree with this idea or not, we can all agree that seeing the IRS’ powers checked is very rare indeed.
And unfortunately, most taxpayers cannot spend the time or the resources necessary to challenge the IRS and their brutal collection efforts through the court system. We speak to taxpayers every day who feel helpless in the face of IRS penalties and collections efforts. But we have good news for them, and for you: you don’t have to fight the IRS alone!
Polston Tax can help. If you’d like to explore your options regarding IRS disputes, call us confidentially or fill out our confidential contact form to schedule your FREE initial consultation. Don’t let the IRS make your life miserable—call us today and take the first steps towards freedom from your IRS dispute!