The Supreme Court's Misconstruction of a Procedural Statute: A Critique of the Court's Decision in Badaracco

Abstract

When a taxpayer files an honest' federal income tax return for a taxable year, section 6501(a) of the Internal Revenue Code2 limits the period of time during which the Government can assess a tax for that year to a three-year period commencing with the date that the return was filed. The three-year limitations period is extended for an additional three years by section 6501(e)(l)(A) if the taxpayer's return omits properly includible gross income in an amount in excess of twenty-five percent of the gross income that was reported. If a taxpayer fails to file a return for a taxable year or files a fraudulent return, sections 6501(c)(l) and (c)(3) permit the tax for that year to be assessed at any time; in other words, there is no limitation on the time available to the Government to assess or collect the tax.