Statue of Limitations Denied due to Tax Preparer Fraud

[Lee B]

Copied from Forbes Tax Breaks Newsletter:

"The tax code generally requires the IRS to make a tax assessment within three years from the return filing date or the return filing deadline, whichever is later. But a recent Tax Court case, Murrin v. Comm’r, T.C. Memo. 2024-10, confirmed a decision that the statute of limitations remained open indefinitely where a tax preparer engaged in fraud, even where the taxpayer did not. In Murrin, roughly 20 years had passed since the filing of their returns, and they argued that the statute of limitations had passed. The Tax Court disagreed."

Interesting case which caught my attention

[BrewOne]

That recalls one case where the IRS put these guys on notice for running a fraudulent scheme (sending all revenue offshore to a trust, which transferred the money to another trust, which paid all their expenses--no income declared).  IRS took their sweet time getting around to the case, thinking they had all the time in the world.  Defense was able to argue that they ran the scheme past their CPA, who said it was okay.  The court ruled no fraud, and therefore statute had run out.

I assume the IRS went after that accountant.