Accounting News

Thursday, April 26, 2012
Supreme Court Accounting Ruling

Yesterday the Supreme Court got involved in an accounting question. The question was whether the statute of limitations for a taxpayer who omits gross income that is properly includible in was in excess of 25% of gross income based on property sold. The Fourth Circuit has ruled that the extension does not apply.

In a split decision the Supreme Court upheld the Fourth Court ruling. The decision was written by Justice Breyer who based the decision on stare decisis {not overturning settled principles of law). Justice Breyer was joined in the decision by Chief Justice John Roberts and Justices Clarence Thomas and Samuel Alito, and Justice Antonin Scalia. Justice Anthony Kennedy wrote the dissenting opinion stating that the statutes had been changed since the prior ruling was issued.

While it might not make the nightly news this demonstrated the importance that accounting rules have in this country. This is a very specific case that will only matter to tax accountants. They have the yearly training and experience that help them understand what changes impact each of their clients.

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