§6503 — Suspension of running of period of limitation
35 cases·8 followed·3 distinguished·1 questioned·3 overruled·20 cited—23% support
Statute Text — 26 U.S.C. §6503
The running of the period of limitations provided in section 6501 or 6502 on the making of assessments or the collection by levy or a proceeding in court, in respect of any deficiency as defined in section 6211 (relating to income, estate, gift and certain excise taxes), shall (after the mailing of a notice under section 6212(a)) be suspended for the period during which the Secretary is prohibited from making the assessment or from collecting by levy or a proceeding in court (and in any event, if a proceeding in respect of the deficiency is placed on the docket of the Tax Court, until the decision of the Tax Court becomes final), and for 60 days thereafter.
If a notice under section 6212(a) in respect of a deficiency in tax imposed by subtitle A for any taxable year is mailed to a corporation, the suspension of the running of the period of limitations provided in paragraph (1) of this subsection shall apply in the case of corporations with which such corporation made a consolidated income tax return for such taxable year.
The period of limitations on collection after assessment prescribed in section 6502 shall be suspended for the period the assets of the taxpayer are in the control or custody of the court in any proceeding before any court of the United States or of any State or of the District of Columbia, and for 6 months thereafter.
The running of the period of limitations on collection after assessment prescribed in section 6502 shall be suspended for the period during which the taxpayer is outside the United States if such period of absence is for a continuous period of at least 6 months. If the preceding sentence applies and at the time of the taxpayer’s return to the United States the period of limitations on collection after assessment prescribed in section 6502 would expire before the expiration of 6 months from the date of his return, such period shall not expire before the expiration of such 6 months.
The running of the period of limitation for collection of any tax imposed by chapter 11 shall be suspended for the period of any extension of time for payment granted under the provisions of section 6161(a)(2) or (b)(2) or under the provisions of section 6163 or 6166.
The running of the period of limitations for collection of the tax attributable to a recovery of a foreign expropriation loss (within the meaning of section 6167(f)) shall be suspended for the period of any extension of time for payment under subsection (a) or (b) of section 6167.
The running of the period under section 6502 shall be suspended for a period equal to the period from the date property (including money) of a third party is wrongfully seized or received by the Secretary to the date the Secretary returns property pursuant to section 6343(b) or the date on which a judgment secured pursuant to section 7426 with respect to such property becomes final, and for 30 days thereafter. The running of such period shall be suspended under this paragraph only with respect to the amount of such assessment equal to the amount of money or the value of specific property returned.
In the case of any assessment for which a lien was made on any property, the running of the period under section 6502 shall be suspended for a period equal to the period beginning on the date any person becomes entitled to a certificate under section 6325(b)(4) with respect to such property and ending on the date which is 30 days after the earlier of—
the earliest date on which the Secretary no longer holds any amount as a deposit or bond provided under section 6325(b)(4) by reason of such deposit or bond being used to satisfy the unpaid tax or being refunded or released; or
the date that the judgment secured under section 7426(b)(5) becomes final.
The running of such period shall be suspended under this paragraph only with respect to the amount of such assessment equal to the value of the interest of the United States in the property plus interest, penalties, additions to the tax, and additional amounts attributable thereto.
The running of the periods of limitations provided in sections 6501 and 6502 on the making of assessments or the collection by levy or a proceeding in court in respect of any tax imposed by chapter 42 or section 507, 4971, or 4975 shall be suspended for any period described in section 507(g)(2) or during which the Secretary has extended the time for making correction under section 4963(e).
The running of the period of limitations provided in section 6501 or 6502 on the making of assessments or collection shall, in a case under title 11 of the United States Code, be suspended for the period during which the Secretary is prohibited by reason of such case from making the assessment or from collecting and—
for assessment, 60 days thereafter, and
for collection, 6 months thereafter.
The running of any period of limitations for collection of any amount of undistributed PFIC earnings tax liability (as defined in section 1294(b)) shall be suspended for the period of any extension of time under section 1294 for payment of such amount.
If any designated summons is issued by the Secretary to a corporation (or to any other person to whom the corporation has transferred records) with respect to any return of tax by such corporation for a taxable year (or other period) for which such corporation is being examined under the coordinated industry case program (or any successor program) of the Internal Revenue Service, the running of any period of limitations provided in section 6501 on the assessment of such tax shall be suspended—
during any judicial enforcement period—
with respect to such summons, or
with respect to any other summons which is issued during the 30-day period which begins on the date on which such designated summons is issued and which relates to the same return as such designated summons, and
if the court in any proceeding referred to in paragraph (3) requires any compliance with a summons referred to in subparagraph (A), during the 120-day period beginning with the 1st day after the close of the suspension under subparagraph (A).
If subparagraph (B) does not apply, such period shall in no event expire before the 60th day after the close of the suspension under subparagraph (A).
For purposes of this subsection—
The term “designated summons” means any summons issued for purposes of determining the amount of any tax imposed by this title if—
the issuance of such summons is preceded by a review and written approval of such issuance by the Commissioner of the relevant operating division of the Internal Revenue Service and the Chief Counsel which—
states facts clearly establishing that the Secretary has made reasonable requests for the information that is the subject of the summons, and
is attached to such summons,
such summons is issued at least 60 days before the day on which the period prescribed in section 6501 for the assessment of such tax expires (determined with regard to extensions), and
such summons clearly states that it is a designated summons for purposes of this subsection.
A summons which relates to any return shall not be treated as a designated summons if a prior summons which relates to such return was treated as a designated summons for purposes of this subsection.
For purposes of this subsection, the term “judicial enforcement period” means, with respect to any summons, the period—
which begins on the day on which a court proceeding with respect to such summons is brought, and
which ends on the day on which there is a final resolution as to the summoned person’s response to such summons.
In any court proceeding described in paragraph (3), the Secretary shall establish that reasonable requests were made for the information that is the subject of the summons.
For suspension in case of—
Deficiency dividends of a personal holding company, see section 547(f).
Receiverships, see subchapter B of chapter 70.
Claims against transferees and fiduciaries, see chapter 71.
Tax return preparers, see section 6694(c)(3).
Deficiency dividends in the case of a regulated investment company or a real estate investment trust, see section 860(h).
35 Citing Cases
Although McAuley has not been overruled, language of former section 6503(i) that the Court of Appeals in McAuley relied on does not appear in the current version of section 6503(h)(2) .14 As indicated supra pp.
Accordingly, their argument that the notices did not suspend the running of the period of limitations pursuant to section 6503-(a) (1) because their "mailing" did not conform to section 6212(a) must fail.
The settlement officer took into account the suspensions of the limitation periods related to bankruptcy proceedings , including the additional 6-month extensions pursuant to section 6503 (h)(2) .
Section 6503 provides that the mailing of a valid deficiency notice suspends the running of the period of limitations with respect to the tax liability that is the subject of such notice.
nt period of limitations to be sus- pended until the Court’s decision becomes final and for 60 days thereafter. See I.R.C. § 6503(a)(1). In P’s view, the 2022 amendment would operate retroactively because it would terminate a limitations period that I.R.C. § 6503 had suspended indefinitely, imposing upon the Government a six-year limitations period that did not exist when the no- tice of deficiency was issued. P has failed to show “clear congressional intent” militating in favor of such retroact
Thus under section 6503, the running of the 3-year assessment period of limitations .
’s “defense” of the statute of limitations appears to ignore a number of statutory provisions, among them sec. 6501(c)(1), providing for an unlimited period of limitations in the case of a false or fraudulent return with the intent to evade tax, and sec. 6503, providing for the suspension of running of the period of limitations under various circumstances, including the issuance of a notice of deficiency. (continued...) - 13 - In view of the foregoing, we hold that respondent's determinations to
Section 6503 provides that the mailing of a valid deficiency notice suspends the running of the period of limitations with respect to the tax liability that is the subject of such notice. In the event a petition is filed with this Court, section 6503(a) also suspends the running of the period of limitations until 60 days after the decision of this
But the notice of deficiency must be issued before the end ofthe period for assessment. Sec. 6213(a). 9Although there are exceptions to the three-yearperiod for assessment, such as, for example, where the taxpayer omits 25% ofgross income from the return, s_ee sec. 6501(e)(1)(A)(i), it would prejudice the IRS for it to have to prove the
askys walked into an IRS office with a check for $18,000. They asked to apply it to their 2009 tax ¹ Taxpayers often prefer to pay more recent tax debts first, because there is a ten-year statute oflimitations for most tax debts, sec. 6502; see also sec. 6503, and because tax debts older than three years generally can be discharged in bankruptcy, 11 U.S.C. sec. 523(a)(1)(A) (2012); see 11 U.S.C. sec. 507(a)(8) (2012); Severo v. Commissioner, 129 T.C. 160, 165 (2007), M, 586 F.3d 1213 (9th Cir. 2
not time barred from assessing income tax attributable to the flowthrough income for Mr. Whitesell for petitioners' tax years 2011 and 2012. See sec. 6501(a); Bufferd v. Commissioner, 506 U.S. 523; Robinson v. Commissioner, 117 T.C. at 319; see also sec. 6503(a) (providing that the period of limitations shall be suspended for the period during which the Secretary is prohibited from making the assessment or a proceeding in Tax Court becomes final and for 60 days thereafter). II. Whether Petitione
Therefore, to fall within the statute oflimitations respondent must have mailed the notice ofdeficiency to petitioner prior to three years after petitioner filed her Federal income tax returns for the years at issue. Petitioner filed her 2006 and 2007 Federal income tax returns on April 15, 2007 and 2008, respectively. In Adams I the Cou
cases. To add to -his woes, he received a Letter 1064 (DO) (or "Defaulted Installment s(...continued) the prescribed time under the Code (i.e., section 6501), the IRS in general has ten years to collect the assessed tax by levy. Sec. 6502. See also sec. 6503 (tolling of the statute of limitations under secs. 6501 and 6502); Jordan v. Commissioner, 134 T.C. 1, 7 n.5 (2010) (discussing the 1990 change to the statute of limitations under sec. 6502). The government, however, cannot levy on property
ed by this Court. However, petitioner's 2000 tax obligation remained assessable because the period of limitations for assessment was tollåd by respondent's mailing of the notice of deficiency and by petitioner's filing a petition in this Court.' See sec. 6503 (a) (1) . A tax that is unassessed but still assessable at the time one files for bankruptcy is not discharged in a chapter 7 b nkruptcy. In Hosack v. IRS, supra at 313, the Court of Appbals for tihe Fifth Circuit stated: Thus, pertinent to
6503; see also secs. 7481, 7483.1 1Although not specifically framed by petitioners, their general argument that “the statute of limitations on assessment had run” could subsume the argument that the assessments after entry of decision were untimely. As can be seen from the pertinent dates, the assessments were in fact timely made. - 10 - On A
ould produce uncertainty as to (a) the ability of the Commissioner to assess the determined deficiency given the restriction contained in the second sentence of sec. 6213(a), and (b) the tolling of the period of limitations on assessment provided by sec. 6503. - 11 - filed even where the petition is filed after expiration of the period prescribed by the first sentence of section 6213(a)) is predicated upon the filing of a petition “on or before the last date specified for filing such petition by
ould produce uncertainty as to (a) the ability of the Commissioner to assess the determined deficiency given the restriction contained in the second sentence of sec. 6213(a), and (b) the tolling of the period of limitations on assessment provided by sec. 6503. Petitioner’s specific argument reads as follows: “Petitioner received the notice of deficiency, but did not file a Petition with the Tax Court within 90 days from the date of the notice of deficiency, since the notice of deficiency did not
Moreover, the period of limitations is an affirmative 2Of this amount, $2,129 was for real property taxes. - 5 - defense and not a bar to jurisdiction. See Rule 39. We will deny petitioners' motion. We turn to the substantive issues, on all of which petitioners bear the burden of proof. See Rule 142(a); Welch v. Helvering, 290 U.S. 111
The $40,950 which petitioners failed to include in their 1988 income is in excess of 25 percent of the amount of gross income stated on the return.3 Thus, on the date respondent's notice of 3 Even if the sale of petitioners' home is taken into account, for sec. 6501(e) purposes, the $14,050 capital gain on the sale, not the $180,000 gros