Temporary Partnership Basis Overstatement Rules Invalid, Tax Court Says

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A majority of the Tax Court holds invalid temporary IRS regulations (T.D. 9466) defining an overstatement of basis as an omission from gross income for purposes of the extended six-year period for assessment of tax attributable to partnership items. The court refuses IRS's call to vacate and reconsider its Sept. 1, 2009, decision granting summary judgment to Intermountain Insurance Service of Vail LLC on the ground that the service's partnership item adjustments were made after the general three-year period of limitations for assessing tax had expired. A number of judges sign concurring opinions agreeing with the majority's result but saying it should have been reached on narrower grounds.