Supreme Court Leaves IRS Free To Chase Taxpayers Forever Over Preparer Fraud
The U.S. Supreme Court declined to hear a Third Circuit case concerning tax preparer fraud, leaving the lower court's ruling in place. The decision allows the Internal Revenue Service to continue assessing and collecting unpaid taxes indefinitely when a preparer commits fraud, even if the taxpayer was unaware. The ruling could affect many taxpayers who relied on fraudulent tax preparers.
- ▪The Supreme Court refused to review a Third Circuit decision that held the IRS can assess tax liabilities when a preparer engages in fraud.
- ▪The Third Circuit ruling permits the IRS to keep the assessment period open indefinitely, regardless of the taxpayer's knowledge of the fraud.
- ▪The decision means the IRS can continue collection actions against taxpayers who used fraudulent preparers.
- ▪Legal experts note the outcome may increase scrutiny of tax preparer practices and impact future litigation.
- ▪The case highlights the challenges taxpayers face when fraud is committed by third‑party preparers.
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MoneyTaxesEditors' PickSupreme Court Leaves IRS Free To Chase Taxpayers Forever Over Preparer FraudThe decision not to hear a Third Circuit case means the time to assess unpaid taxes can remain open when the tax preparer committed fraud—even if the taxpayer didn’t know about it.ByKelly Phillips Erb,Senior Writer. Kelly Phillips Erb is a Forbes senior writer who covers tax.Follow AuthorJun 25, 2026, 10:49pm EDT--:-- / --:--This voice experience is generated by AI. Learn more.This voice experience is generated by AI.
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