Tax Legal Services · Primary-source case analysis

Home Concrete: Basis Overstatement Did Not Trigger the Six-Year Assessment Period

By Aneeta Mishra and Timothy Chan

Published April 18, 2026

Home Concrete applies precedent and stare decisis to distinguish omitted receipts from an overstated basis that reduces reported gain.

Assessment outside three years

The taxpayers overstated basis in property they sold, causing gross income on the returns to be understated by more than 25 percent. The Commissioner assessed deficiencies after the ordinary three-year period but within the six-year period for a qualifying omission from gross income.

Colony controlled the statutory phrase

The Court treated the materially identical language construed in Colony as controlling. An overstatement of basis may understate income, but it does not 'omit' a specific receipt from the computation of gross income in the sense that precedent assigned to the statute.

A later regulation could not change the answer

Treasury had promulgated a regulation adopting the government's broader reading. The plurality concluded that Colony had already resolved the statutory meaning, leaving no alternative construction for the agency to adopt through deference.

Disposition and historical scope

The Court affirmed the Fourth Circuit and rejected the six-year period on these facts. Congress later amended aspects of the limitations rule, so current disputes must begin with the return year and operative statutory version rather than treating Home Concrete as timeless text.

Key takeaways

• Distinguish omitted receipts from overstated basis.
• Identify the statute in force for the tax year at issue.
• A controlling judicial construction can limit later agency interpretation.
• Limitations defenses require precise filing, assessment, and statutory dates.