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For those of you who caught my National Treasure reference, here's the scene:

(And apologies for the crazy ads in the beginning, honestly, if I could cut them, I would. I DO NOT endorse *ANY* of those products.)

"I'm Gonna Steal the Declaration of Independence" | Watch National Treasure On TNT Watch National Treasure (2004) on TNT. When a rival treasure hunter...

This week’s free Tax Breaks newsletter is out.

The theme this week is fairness—and what happens when the tax system does not work the way taxpayers expect.

First up: the Supreme Court’s decision in Pung v. Isabella County, the follow-up to Tyler v. Hennepin County. In Pung, the Court considered how much a government owes a former homeowner after it forecloses on a home for unpaid taxes and sells it at auction.

The Supreme Court was less eager to take up another fairness question in Murrin v. Commissioner. There, the Court declined to hear a case involving a taxpayer whose returns were prepared by someone who put false information on them with intent to evade tax.

Also in this week’s issue:
• IRS guidance on responsible AI use in tax practice
• TIGTA’s report finding that the IRS cannot prove its chatbots and live-chat tools are working
• Whether a taxpayer may qualify for HOH when supporting a parent
• Social Security funding
• Why the year of sale matters for tax purposes
• State-level child tax credits

And of course, Taxes from A to Z, and tax trivia.

Read and subscribe here:

What's Fair In Tax? The Supreme Court Weighs In ⚖️ Plus: It’s Supreme Court opinion season, more on claiming a parent as a dependent, Social Security solvency, state tax credits, taxes from A to Z, tax trivia and more.

The Supreme Court declined to hear Murrin v. Commissioner, leaving in place a Third Circuit ruling that significantly expands when the IRS can go back and assess unpaid taxes.

The ordinary rule is that the IRS generally has three years after a return is filed to assess additional tax. That deadline matters because, after enough time has passed, taxpayers and the government are supposed to be able to move on.

But there is a major exception. When a return is false or fraudulent with intent to evade tax, the IRS can assess additional tax at any time. The question in Murrin was: whose intent counts?

Stephanie Murrin argued that the fraud exception should apply only when the taxpayer intended to evade tax. The IRS argued that a return preparer’s intent was enough.

The government did not allege that Murrin personally put false information on the returns or intended to evade tax. Instead, it argued that her preparer included false entries on the returns and acted with the required fraudulent intent.

The Tax Court agreed with the IRS. So did the Third Circuit. SCOTUS declined to hear the case.

That does not mean the Court agrees with the Third Circuit. But in practical terms, it is a significant win for the IRS.

Murrin shows that the consequences of preparer fraud can follow taxpayers who did not personally intend to evade tax—for years, or even decades. And it's a good reminder about the importance of choosing a good preparer.

More here:

Supreme Court Leaves IRS Free To Chase Taxpayers Forever Over Preparer Fraud The decision means the time to assess unpaid taxes can remain open when the tax preparer committed fraud—even if the taxpayer didn’t know about it.