SOL for unreported listed transactions.

• Author: Manning, Paul
• Position: Statute of limitations

Sec. 6501 requires taxes to be assessed within three years after the date a return is filed. However, that period is extended to six years for substantial omissions of items of gross income, defined as omissions totaling more than 25% of the gross income shown on the return. Tax cannot be assessed or collected if it is not made within the required time periods. If a taxpayer files a false or fraudulent return with the intent to evade tax or does not file a return, tax may be assessed at any time.

New Law

AJCA Section 814 amends Sec. 6501 to extend the statute of limitations (SOL) for a listed transaction if a taxpayer fails to include information on that transaction with a return or statement for a tax year. The SOL for a listed transaction does not expire before the date that is one year after the earlier of the date (1) on which the IRS is provided the required information or (2) a material advisor satisfies the list maintenance...