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Voting Colony Off the Island
Tax Notes Federal (2011)
  • Melinda Dunmire, University of Baltimore School of Law
This article concludes that for the purposes of interpreting IRC section 6501, Colony is not binding authority. The courts deferring to Colony to determine whether the underreporting of gross income as a result of an overstatement of basis constitutes an omission from gross income are doing so erroneously. Colony is not precedential or persuasive because it contemplated the application of a particular and altogether different statute from the pre-1954 Internal Revenue Code. Colony also is not precedential because the statute it construed was repealed. Instead of presuming that a case interpreting a statute from the 1939 Internal Revenue Code controls, courts should focus on the present statute as modified by Congress and the regulations as promulgated by Treasury. Further, the Supreme Court should grant certiorari on a recent case to clarify the scope of the application of Colony along with its precedential value as to section 6501.
  • Colony,
  • Basis,
  • 6501,
  • Supreme Court,
  • statutory construction,
  • statute of limitations
Publication Date
Summer June 21, 2011
Publisher Statement
This article discusses the disparate precedential value attributed to Colony by various circuit courts and whether it should be dispositive for determining if the failure to report income attributable to an overstatement of basis constitutes an omission from gross income for purposes of extending the statute of limitations under section 6501(e)(1)(A).
Citation Information
TAX NOTES, JUNE 20, 2011, P. 1265131 TAX NOTES 1265 (JUNE 20, 2011)