High Court Arguments in ‘Home Concrete' Center on Ambiguity Claims

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At the heart of the arguments before the U.S. Supreme Court in United States v. Home Concrete & Supply LLC is the question of whether there was enough ambiguity in tax code Section 6501(e)(1)(A) for the court to overturn its 1958 ruling on Colony Inc. v. Commissioner and uphold related Treasury regulations. The high court had ruled in Colony that an overstatement of basis did not constitute an omission from gross income that triggered the extended six-year assessment period under Section 6501(e)(1)(A). However, that ruling was based on the 1939 version of the tax code and Congress amended the provision in 1954 to limit its application. Several justices note that Colony was decided before the Supreme Court had decided Chevron U.S.A. Inc. v. Natural Resources Defense Council Inc., which provides that agencies may address statutory ambiguity through administrative regulations.