-5-
years at issue expired before respondent issued petitioner the
deficiency notice. Respondent argues that the preparer’s
fraudulent intent to evade tax is sufficient to keep the
limitations periods open. Petitioner counters that only the
intent of the taxpayer, not the preparer, is relevant to whether
the returns were fraudulent so as to extend the limitations
period.
Plain Meaning Analysis
The statute provides that the tax may be assessed at any
time “[i]n the case of a false or fraudulent return with the
intent to evade tax.” Sec. 6501(c)(1). Notably absent from this
provision is any express requirement that the fraud be the
taxpayer’s.3
Nothing in the plain meaning of the statute suggests the
limitations period is extended only in the case of the taxpayer’s
fraud. The statute keys the extension to the fraudulent nature
3Rules regarding the limitations period in the case of false
and fraudulent returns have been in the Code since the Revenue
Act of 1918. Revenue Act of 1918, ch. 18, sec. 250(d), 40 Stat.
1083. That provision addressed the statute of limitations that
applied “in the case of false or fraudulent returns” and did not
by its terms require that the fraud be that of the taxpayer. Id.
The version of the Revenue Act of 1934 that passed the House Ways
and Means Committee would have amended this section to read: “If
the taxpayer * * * files a false or fraudulent return with intent
to evade tax * * * the tax may be assessed * * * at any time.”
H.R. 7835, 73d Cong., 2d Sess. sec. 276(a) (1934) (as passed by
House, Feb. 21, 1934). The Senate Committee on Finance discarded
this language, however, with no discussion. The enacted version
continued to focus on the return with no express requirement that
the fraud be the taxpayer’s and remains the language in sec.
6501(c)(1) today. Revenue Act of 1934, ch. 277, sec. 276(a), 48
Stat. 745; S. Rept. 558, 73d Cong., 2d Sess. 43-44 (1934), 1939-1
C.B. (Part 2) 586, 619.
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