Supreme Court Grants Cert. to Decide § 6662 Penalty for Overstatement of Basis

The U.S. Supreme Court yesterday granted certiorari in United States v. Woods, No. 12-562:

Issue: (1) Whether Section 6662 of the Internal Revenue Code, which prescribes a penalty for an underpayment of federal income tax that is “attributable to” an overstatement of basis in property, applies to an un­derpayment resulting from a determination that a transaction lacks economic substance because the sole purpose of the transaction was to generate a tax loss by artificially inflating the taxpayer’s basis in property. (2) Whether the district court had jurisdiction in this case under 26 U.S.C. § 6226 to consider the substantial valuation misstatement penalty.

For more, see:

• Miller & Chevalier Tax Appellate Blog, Supreme Court Poised to Consider Penalty Issue in Woods
• Miller & Chevalier Tax Appellate Blog, Supreme Court Agrees to Hear Penalty Issue in Woods
• Jack Townsend (Houston), Supreme Court Will Decide Whether Bullshit Tax Shelters with Basis Overstatements Draw the 40% Penalty