Update on Murrin Petition for Cert re Unlimited Civil Statute of Limitations for Non-Taxpayer Fraud Reported on Tax Return (5/19/26)

I provide an update on the Murrin petition for certiorari. The Supreme Court’s docket sheet is here. On May 15, 2026, the Government filed its brief in opposition here. I have recently addressed some points on the Murrin petition before the Government’s Brief in Opp. Further on Murrin and Allen and the Unlimited Statute of Limitations for Fraud on the Return (Federal Tax Procedure Blog 4/30/26), here.

The Government distinguishes (Brief in Opp. 13-15) the principal case indicating a possible conflict (a key factor in the Supreme Court accepting cert). That case is BASR Partnership v. United States, 795 F.3d 1338 (Fed. Cir. 2015), GS here. The Government asserts that Murrin involves fraud by the tax return preparer whereas BASR did not involve fraud by the tax return preparer (the fraud was by others in the bullshit shelter feeding chain, such as promoter and lawyers issuing bullshit opinions). That distinction strikes me as irrelevant to a textual reading of § 6501(c)(1).

The text is:

In the case of a false or fraudulent return with the intent to evade tax, the tax may be assessed, or a proceeding in court for collection of such tax may be begun without assessment, at any time.

Once you say that fraud by someone other than the taxpayer that resulted in fraudulent reporting on a false return is sufficient, the text does not limit it to the taxpayer and the tax return preparer.

I have no idea (but speculate below) why the Government attempts to limit the scope of § 6501(c)(1). I do know that a reading of the text to include fraud on the return regardless of whose fraud it is (the promoters, lawyers, etc., and others involved (other than the tax return preparers)) could invoke the section. I also know that, based on my substantial involvement as a practitioner, observer, and commentator over the years, many, many taxpayers beat the normal statute of limitations and thus, to date, have not suffered the consequences of false reporting and have not paid the tax, interest, and penalties had the IRS acted against them within the then-thought statute of limitations. Now that we know (or should know for the reason stated above) that there is an unlimited statute of limitations, these taxpayers should be at risk from a broader reading of § 6501(c)(1) beyond tax return preparers.

Moreover, even if § 6501(c)(1) were limited to tax return preparers (by a constricted reading into 6501(c)(1)), the definition of tax return preparers might sweep up many of these taxpayers because a key component of the marketing of the bullshit shelters was advising or assisting on return reporting for the sham transactions. The definition of a tax return preparer is in § 7701(36) [see § 7701 here and scroll down]. And how that might expand beyond the normal understanding of tax preparer, see 26 CFR § 301.7701-15, here. See Jeffrey Malo, Deanne B. Morton, Daniel Z. Nettles, Leland Quinn, Return preparer reliance on third-party tax advice (The Tax Advisor 2/27/26), here. I dare say (really speculate) that most nominal tax return preparers signing the returns as such reporting these bullshit positions likely imagined that they were relying upon the third party bullshit advice orchestrated by the promoters. And, in any event, the third party bullshit advisers were likely directly principals, accomplices under 18 USC 2(a), or causers under 18 USC 2(b). The fraudulent reporting that they orchestrated to appear on the returns should suffice under 6501(c)(1).

Should we feel any sympathy for taxpayers now having to pay up for their too good to be true positions (many of them actually knowing that they were reporting less tax liability than they owed)? No. (Although I would carve out a discretionary call by the IRS to exclude little fish taxpayers like Allen and Murrin.)

But, in my imagination (an editorial comment), the Trump administration seeking in the Murrin Brief in Opp. to limit 6501(c)(1) to return preparers is another attempt to let these mega-wealthy taxpayers off the hook (which may even include the President for his possible tax forays in bullshit tax positions, although I understand that the President has denied tax evasion or, probably, claime that his return reporting was anything less than perfect and the best the IRS has ever seen).

Addendum 5/19/26 3:50pm:

Justice Department expands Trump settlement to cover his tax audits (Politico 5/19/26), here. I quote the opening paragraph:

The Justice Department on Tuesday expanded the just-announced settlement of President Donald Trump’s lawsuit over the leaking of his tax returns to include a pledge that the IRS will no longer pursue any claims it may have against Trump, his family members and his companies over unpaid taxes.

The opening paragraph is no substitute for the whole article. But it appears that Trump just granted himself the right to not pay the taxes he owed.