09-3741 Beard v. CIR

By: WISCONSIN LAW JOURNAL STAFF//January 26, 2011//

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Tax
Income tax; statute of limitations

An overstatement of basis can be treated as an omission from gross income, triggering a six-year statute of limitations.

“[A] plain reading of Section 6501(e)(1)(A) would include an inflation of basis as an omission of gross income in non-trade or business situations. See Regions Hospital v. Shalala, 522 U.S. 448, 467 (1997); Hawkins v. United States, 469 F.3d 993, 1000 (Fed. Cir. 2006). It seems to us that an improper inflation of basis is definitively a ‘leav[ing] out’ from ‘any income from whatever source derived’ of a quantitative ‘amount’ properly includible. There is an amount—the difference between the inflated and actual basis—which has been left unmentioned on the face of the tax return as a candidate for inclusion in gross income.”

Reversed.

09-3741 Beard v. CIR

Appeal from the United States Tax Court, Evans, J.

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