Wadlow v. Commissioner

LARO, J., concurring: I agree with the majority’s holding that the period of limitations does not prevent petitioners from recovering overpayments of their 1991 and 1992 income taxes. I write separately, however, to set forth my view as to why this is so.

The Court’s disposition of this case turns on our answer to the following question that evolves from the text of section 6501(c)(4): “before the expiration of the time prescribed in this section for the assessment of any tax imposed by this title * * *, [did] both the Secretary and the [taxpayers] * * * [consent] in writing to its assessment after such time”? Like the majority and Judges Chabot and Foley in concurrence, I conclude that the Commissioner and petitioners both did.

Longstanding Supreme Court precedent provides that the term “agreement” as used in section 6501(c)(4) does not require that a taxpayer and the Commissioner enter into an agreement that meets the formal requirements of a contract under applicable law. See Stange v. United States, 282 U.S. 270, 276 (1931); Florsheim Bros. Drygoods Co. v. United States, 280 U.S. 453, 466 (1930). Section 6501(c)(4) simply mandates that the Commissioner and the taxpayer execute a written document that allows the former to assess tax against the latter after the statutory period that would otherwise apply. In the instant case, Form 5213 is that written document. Petitioners prepared Form 5213, and they signified their agreement to the terms therein by filing it with the Commissioner. The Commissioner, on the other hand, signified his agreement to those terms by accepting petitioners’ form without reservation. See Instructions to Form 5213, in which the Commissioner states that the filing of Form 5213 “automatically extends the period of limitations for assessing any income tax deficiency.”; see also sec. 183(e)(3) (“An election * * * [under section 183(e)] shall be made at such time and manner, and subject to such terms and conditions, as the Secretary shall prescribe.”). Although both section 183(e)(4) and the instructions to Form 5213 speak solely to the ability to assess a deficiency, section 6511(c) acts to allow petitioners to seek a refund during the same period of time under which the Commissioner may assess a deficiency. In this regard, this Court considers an election under section 183(e) to have been made under section 6501(a). See Crawford v. Commissioner, 97 T.C. 302, 307 (1991), wherein the Court stated that section 6501(a) is read as if section 183(e)(4) were written therein.

Chabot, Beghe, Foley, and Vasquez, JJ., agree with this concurring opinion. .