Supreme Court lets stand IRS power to assess tax anytime for preparer fraud

The Supreme Court’s decision this week to deny certiorari in Murrin lets stand a Third Circuit holding that the Sec. 6501(c)(1) unlimited period for the assessment of tax applies when a fraudulent return is filed with the intent to evade tax, regardless of whether the intent is that of the taxpayer or another person, including the taxpayer’s return preparer.

Stephanie Murrin was assessed taxes and penalties in 2019 based on returns she filed from 1993 to 1999, prepared by a tax return preparer. She now owes $328,000, including interest on the assessment, her attorneys said in a petition for certiorari.

Murrin challenged the IRS’s determination in Tax Court, claiming that the assessment was barred by the three-year statute of limitations in Sec. 6501(a). But under Sec. 6501(c)(1), the IRS can assess tax at any time when a false or fraudulent return is filed with the intent to evade tax. The Tax Court this week sided with the IRS. Read more.