The Taxpayer's Duty of Consistency
46 Pages Posted: 20 Aug 2011
Date Written: August 19, 2011
Abstract
A transaction may affect the taxpayer's federal tax liability for both the current period and subsequent periods. No difficulty arises if the taxpayer treats the transaction consistently over the periods. However, significant tax distortions are possible if the taxpayer's characterization of the transaction varies from period to period. A recharacterization may be particularly troublesome if the statute of limitations has expired, and the first period is not open to correction at the time the inconsistent representation is made.
Suggested Citation: Suggested Citation
Johnson, Steve R., The Taxpayer's Duty of Consistency (August 19, 2011). Tax Law Review, Vol. 46, p. 538- 1990-1991, Available at SSRN: https://ssrn.com/abstract=1912800
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