Supreme Court Docket Report - March 25, 2013

On March 25, 2013, the Supreme Court granted certiorari in one case of interest to the business community:

Taxation—Penalties for Overstating Basis—District Court Jurisdiction

Section 6662(e) of the Internal Revenue Code imposes a penalty for an underpayment of income tax that is "attributable to" an overstatement of the value or basis of property. Today, the Supreme Court granted certiorari in United States v. Woods, No. 12-562, to decide whether that penalty "applies to an underpayment resulting from a determination that a transaction lacks economic substance because the sole purpose of the transaction was to generate a tax loss by artificially inflating the taxpayer's basis in property." The Supreme Court's decision may also address the broader question whether the IRS may impose an overvaluation penalty even when the claimed tax benefit could be disallowed on grounds unrelated to valuation (e.g., when an inflated charitable contribution might be disallowed in