Clarifications and Corrections

Despite our efforts to avoid them, we have found a few errors in the second edition of the Casebook and Teacher's Manual.  They are listed below.  We apologize for any confusion or inconvenience that these errors may have caused.

In Chapter 5, in the example on mitigation on pages 271-272, the IRS would be barred by Code section 1311(b)(2)(A), assuming a 3-year statute of limitations on assessment (expiring April 15, 1999), because the IRS first maintained its position in the notice of deficiency sent on January 10, 2000.  

In Chapter 8, on page 406, the sentence that reads "What [6512(b)(3)(B)] does, in a situation in which the taxpayer did not file a refund claim before the notice of deficiency was mailed, and the payment in question was made after the notice was mailed, is to deem the date the notice was mailed to be the date of a hypothetical refund claim for purposes of determining timeliness of that claim under section 6511" should be revised to read as follows: "What it does, particularly in a situation in which the taxpayer did not file a refund claim before the notice of deficiency was mailed, and the payment in question was not made after the notice was mailed, is to deem the date the notice was mailed to be the date of a hypothetical refund claim for purposes of determining timeliness of that claim under section 6511."  Note that, by its terms, section 6512(b)(3)(B) can apply regardless of whether a refund claim was filed before the notice of deficiency was mailed.  However, if such a claim were filed, section 6512(b)(3)(C) may apply.  Similarly, if payment was made after the mailing of the notice if deficiency, section 6512(b)(3)(A) can apply.

In Chapter 10, in Section 10.02[D] on page 508, in the third line, the following phrase should be deleted: "the delinquency penalty in section 6651."  

Also in Chapter 10, on page 511, in the reproduction of Internal Revenue Manual section 1.3.1.2.3 (1)(a.), the word "not" was inadvertently omitted.  The sentence should read, "Relying on another person to perform a required act is generally not sufficient for establishing reasonable cause."

Teacher's Manual:

In Chapter 1, the Teacher's Manual says that Code section 7525 does not apply to a letter from Carmen, a CPA, encouraging Bill Billionaire to invest in a tax shelter.  However, section 7525(b) states that section 7525(a) does not apply to "any written communication between a federally authorized tax practitioner and a director, shareholder, officer, or employee, agent, or representative of a corporation in connection with the promotion of the direct or indirect participation of such corporation in any tax shelter . . . ." (emphasis added).  Carmen is apparently soliciting an investment from Bill in his individual capacity, so the subsection (b) exclusion from section 7525(a) would not apply.

In Chapter 5, the dates were updated in Problem 1.B.i.c. but the updated dates are not reflected in the problem as it is reproduced in the Teacher's Manual on page 84.  In addition, tolling in that problem should extend 2 years and 183 days, bringing the expiration date to October 15, 2005.

Also in Chapter 5, the facts of problem 4 do not raise the issue of the penultimate Form 872 extension expiring before the final 872 was signed.  Professors may wish to vary the facts with the hypothetical that the final Form 872 was signed on May 1, 1999, which is the fact pattern addressed in the Teacher's Manual on pages 86-87.