United States v. Home Concrete & Supply, LLC (11-139)
argument 11-139United States v. Home Concrete & Supply, LLC
Supreme Court of the United States
59 min
6 speakers
8 chapters
transcribed 6 days ago
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What is the central legal question presented in United States v. Home Concrete & Supply?
We'll hear argument first this morning in case eleven one hundred thirty nine, United States versus home concrete and supply. Mr. Stewart.
Mr. Chief Justice, and may it please the Court, the disputed question in this case concerns the meaning of the phrase omits from gross income an amount properly includable therein in twenty six USC sixty five oh one E one A. More specifically, the question is whether an omission from gross income occurs when a taxpayer overstates his basis in sold property and thereby understates the gain that results from the sale. In December twenty ten, after notice and comment rulemaking, the Treasury Department issued published regulations that interpreted Section 6501 E1A to apply in overstatement of basis cases. Those regulations reflect a reasonable interpretation of ambiguous statutory language, and they are accordingly entitled to deference under Chevron.
Well, but only if uh your reading of the colony decision is correct, right? If we think that colony definitively resolved the question before you, the regulation can't overturn that.
If the court in colony had interpreted the statutory language to be ambigu unambiguous, or if the Court in Colony had issued an authoritative interpretation that Congress had then built upon, that would be correct. But the Court in Colony stated that the language was, in its words, not unambiguous.
Yes, but once once we uh resolve an ambiguity in a statute, that's the law. And the agency cannot i issue a a regulation that changes the law just because going in the language was ambiguous.
I I think I don't think that the Court in Colony purported to give a definitive definition of the phrase omits from gross income and amount properly includable therein wherever it appears in the United States Code. And the Court in the first paragraph of its opinion in Colony said the sole question before us is whether the taxpayer is subject to the extended assessment period under the nineteen under the Internal Revenue Code of nineteen thirty nine. And as the DC circuit, for instance, pointed out in Intermountain.
How does the Court interpret the phrase “omits from gross income an amount properly includable therein” under § 26 USC 6501(e)(1)(A)?
What we are interpreting now is the nineteen fifty four code. It's true that like the nineteen thirty nine code, it includes the phrase omits from gross income and amount properly includable therein, but it also includes adjacent provisions that bear upon the meaning of that phrase.
Well, if they use the exact same phrase, and it's a fairly detailed f it's not just a normal phrase they might use elsewhere. I think it's reasonable to assume that that phrase came in uh uh with the baggage it w it uh carried from the colony case, right?
I think it's important to remember that the 1954 code was enacted in 1954 and the colony decision came in 1958. And so I would take your point that if Congress had enacted the same language after this court's decision in colony, then the adjacent statutory provisions that we're relying on would be pretty indirect means of an ex of expressing an intent to change the law. But what Congress was reacting to in nineteen fifty four was not this court's colony decision, it was reacting to a circuit conflict and trying to resolve that conflict.
Yeah, but our our job is not to plumb Congress's uh psyche. And decide what they had in mind, it's to interpret the statute. And if, as you acknowledge, it's a pretty obscure way to change the law from what we said it was, the law that's written there. That's a very obscure way to change it. I'm inclined to think that the law stays the way it was. Well,
let me point to the statutory provisions that that I have in mind to explain a little bit more fully why we think that the context in which the new provision or the the 1954 provision appears bears on the the proper interpretation of the disputed phrase. It is at page one A of the the Red Brief, the appendix to the Respondents Brief. And the gener the general rule stated in subsection A is if the taxpayer omits from gross income an amount properly includable therein, which is in excess of twenty-five percent of the amount of gross income stated in the the return, uh the assessment period is six years rather than three years.
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Chapters
8 chapters
1
What is the central legal question presented in United States v. Home Concrete & Supply?
0:01–2:07
2
How does the Court interpret the phrase “omits from gross income an amount properly includable therein” under § 26 USC 6501(e)(1)(A)?
2:07–6:59
3
Why do the parties argue that the Treasury’s 2010 regulations should receive Chevron deference?
6:59–13:22
4
What role does the 1958 *Colony* decision play in the parties’ statutory construction arguments?
13:22–26:16
5
How does the IRS’s 2000‑2009 guidance on “son of boss” transactions affect the statute‑of‑limitations issue?
26:16–39:40
6
Is the Treasury’s regulation retroactive, and what legal standards govern retroactive rulemaking?
39:40–50:27
7
How do the parties apply the Brand X framework to determine whether the agency can overrule *Colony*?
50:27–58:00
8
What is the Court’s ultimate holding on the extended assessment period for overstatement of basis?
58:00–59:43