Sheldon B. Bufferd v. Commissioner of Internal Revenue (506 U.S. 523)
U.S. Supreme Court · decided January 25, 1993 · Supreme Court Database (Spaeth)
- Citation
- 506 U.S. 523 · 113 S. Ct. 927
- Decided
- January 25, 1993
- Term
- October Term 1992
- Vote
- 9–0
- Majority author
- Justice White
- Issue area
- Federal Taxation
- Disposition
- Affirmed
- Outcome
- Petitioning party lost
- Ideological direction
- Liberal
Opinion excerpt
Justice White delivered the opinion of the Court. On his 1979 income tax return, petitioner, a shareholder in a Subchapter S corporation, claimed as “pass-through” items portions of a deduction and a tax credit reported on the corporation’s return. The question presented is whether the 3-year period in which the Internal Revenue Service is permitted to assess petitioner’s tax liability runs from the filing date of the individual return or the corporate return. We conclude with the Tax Court and the Court of Appeals for the Second Circuit that the relevant date is that on which petitioner’s return was filed. I Subchapter S of the Internal Revenue Code, 26 U. S. C. §§ 1361-1379, was enacted in 1958 to eliminate tax disadvantages that might dissuade small businesses from adopting the corporate form and to lessen the tax burden on such businesses. The statute accomplishes these goals by means of a pass-through system under which corporate income, losses, deductions, and credits are attributed to individual shareholders in a manner akin to the tax treatment of partnerships. See §§ 1366-1368. In addition, since 1966, “S corporations” have been liable for certain capital gains and other taxes. 80 Stat. 111, 113; 26 U. S. C. §§ 1374, 1378. Petitioner was treasurer and a shareholder of Compo Financial Services, Inc., an S corporation. On February 1, 1980, Compo filed a return for the…
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