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Saturday, February 12, 2011

Critiquing the 3d & 7th Circuits' Approval of the 2-Year SOL Innocent Spouse Reg

Following up on my earlier post, 3d Cir. Joins 7th Cir. in Reversing Tax Court and Upholding Innocent Spouse Reg (Jan. 20, 2011): A. Lavar Taylor, Adjunct Professor at Chapman and Director of the Center for the Fair Administration of Taxes, passed along its motion in the Ninth Circuit for leave to file this amicus brief on behalf of a taxpayer, arguing that the Tax Court properly rejected the two-year statute of limitations in Reg ยง 1.6015-5(b)(1) for bringing innocent spouse claims. The brief criticizes on a number of grounds the Third Circuit recent contrary decision in Mannella v. Commissioner, No. 10-1308 (3d Cir. Jan. 19, 2011).

http://taxprof.typepad.com/taxprof_blog/2011/02/a-critique.html

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Comments

Criticize it all you want. How can a Tax Court Division opinion (Campbell) and memorandum opinions upholding the same rule in a Rev Proc (or Rev Rul--I forget) be ignored in this debate? First the Tax Court held that the 2-year rule was a correct application of the law. When IRS/Treasury turns the lower guidance into a Treas. Reg. it is suddenly nullified by the Tax Court? What happened? Oh, wait--nothing.

Now the playing field is really stacked in favor of the IRS: M-A-Y-O. How in the world can any court overturn the Reg after Mayo? Forget that it was upheld in a lessor ruling than a Reg, how does any court applying Chevron deference, per Mayo, to the Reg find a way to invalidate it?

You know the old real estate saying about the 3 most important things in real estate: Mayo, Mayo, and Mayo.

Posted by: tax guy | Feb 13, 2011 5:57:53 PM