District Court Reiterates The Difference Between Adjustment And Assessment Of Tax

The U.S. District Court for the District of Colorado reiterated in a Jan. 13 decision that the IRS has the ability to make an adjustment in a taxable year that is closed for assessment purposes to reflect the correct tax owed, which is separate and apart from the IRS's ability to make an assessment of tax. In Hamilton v. U.S., No. 13-cv-00051-REB-KMT (D. Colo. 2016), the individual taxpayer claimed charitable contribution deductions for certain years. The taxpayer executed a restricted consent to extend the statute of limitations for the charitable contribution deductions, and it appears from the facts that the IRS made adjustments to other items to offset the tax benefit of the deductions. In the court case, the taxpayer argued that because he had executed a restrictive consent, the IRS may not redetermine the correct amount of tax for any items other than the charitable contribution deductions. The...