Preparer’s fraud means no deadline for IRS assessment
Murrin v. Commissioner, No. 24-2037, 2025 BL 373163 (3d Cir. Oct. 17, 2025), Court Opinion
The Third Circuit held that the section 6501(c)(1) “false or fraudulent return with the intent to evade tax” exception does not require the taxpayer’s own fraudulent intent, so the IRS may assess at any time when a return is fraudulent due to a third party, such as a preparer.
Holding
The court affirmed the Tax Court. Section 6501(c)(1) applies when a false or fraudulent return is filed with an intent to evade tax, regardless of whether the intent is held by the taxpayer or by another person, such as a return preparer. Because the taxpayer’s preparer inserted false entries intending to evade tax for 1993 through 1999, the IRS’s 2019 notice of deficiency was not time-barred.
Why It Matters
Confirms in the Third Circuit that the indefinite limitations period in section 6501(c)(1) is triggered by anyone’s intent to evade tax tied to a fraudulent return.
Aligns with Tax Court precedent and the Second Circuit’s formulation, and departs from the Federal Circuit’s BASR decision.
Distinguishes betw…
