Intermountain Ins. Serv. v. Commissioner, IRS, No. 10-1204 (D.C. Cir. 2011)
Annotate this CaseThe Commissioner of the IRS and appellees disagreed about appellees' 1999 gross income where the disagreement stemmed from appellees' sale of assets and centered primarily on the Commissioner's conclusion that appellees inflated its basis in those assets. At issue was whether the Commissioner waited too long to adjust appellees' gross income pursuant to sections 6501(e)(1)(A) and 6229(c)(2) of the Internal Tax Code. The court held that the Commissioner's regulations were validly promulgated, applied to the case, qualified for Chevron deference, and passed muster under the traditional Chevron two-step framework. Because the Tax Court concluded otherwise and failed to apply the Commissioner's interpretation of sections 6501(e)(1)(A) and 6229(c)(2), the court reversed the Tax Court's grant of summary judgment. The court remanded for the Tax Court to consider appellees' alternative argument made in the tax court but unaddressed there, that appellees avoided triggering the extended statute of limitations by "adequately disclos[ing] to the IRS the basis amount it applied in connection with the transaction at issue."
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