Congress amended Section 6501(l) effective 12/29/22. The amendment stated that filing a 1040 without a Form 5329 (excess IRA contributions) is sufficient to start a 6SOL running on assessment.

Judge Albert G. (“Scholar Al”) Lauber says the amendment applies to returns filed on or after 12/29/22. Judge Emin (“Eminent”) Toro says Judge Scholar Al went too far: the statute limits IRS’ ability to assess tax. Doesn’t matter when the return was filed; if no SNOD within 6 years thereafter IRS can’t assess the 6% excess contribution chop.

But that doesn’t help Clair R. Couturier, Jr., 162 T. C.4, filed 2/28/24. His return was filed away back in 2005; IRS issued the SNOD in 2016, which Clair timely petitioned. The old Paschall-Mazzei law applies. See 162 T. C. 4, at p. 6.

For Paschall, see my blogpost “Dies Ira,” 7/5/11; for Mazzei, see my blogpost “Caligula In Tax Court?” 3/5/18.

Judge Emin (“Eminent”) Toro, leading the concurrence squad, says Judge Scholar Al went too far, and took the majority with him. The issue isn’t returns, it’s assessment. The whole of Section 6501 deals with when IRS can assess. Clair loses because IRS could’ve assessed pre-2022, except the automatic stay in Section 6213(a) prevented that while Clair and his trusty attorneys invoked the leisurely litigation practices of Tax Court. But for anyone who hadn’t been hit with a Section 4973 SNOD sooner than six (count ’em, six) years prior to 12/29/22, it’s “homefreeall!” as we used to yell on the sidewalks of The Bronx so long ago.

Ex-Ch J Maurice B. (“Mighty Mo”) Foley is joined by Judge Alina I. (“AIM”) Marshall in dissenting. The rest of y’all have found ambiguity where there is none. The statute is clear; if a 1040 was filed pre-12/29/22, that’s it. The statute is not “purely prospective.”

“Congressional scriveners do not need our drafting assistance. While Congress implemented narrower effective dates for other provisions in the Act, it, notably, did not do so here.” 162 T. C. 4, at p. 43.

Scorecard: Ch J Kerrigan, Judges Nega, Pugh, Ashford, Copeland, and Weiler go with Judge Lauber. Judges Buch, Urda, Jones, and Greaves are with Judge Toro. So it’s 7-5-2.

See my blogpost for “FIIK,” 4/19/18, for what happens with a fractured opinion like this one. Exactly what did Tax Court decide?

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Please pardon a late posting, but the premiere of Turandot didn’t finish until almost 2300 last night; the debuts of Oksana Lyniv at the podium, and Elena Pankratova in the title role, a Ukrainian-Russian collaboration mediated by an Italian that I pray becomes universal, were a better way to spend the evening.