Alan Horowitz discusses the Tenth Circuit's ruling in Salman Ranch Ltd. v. Commissioner in light of the Treasury Department's issuance of regulations applying the six-year limitations period to Son-of-BOSS tax shelters. “I would say that the reasoning of the Federal Circuit's Salman Ranch opinion is still good law, but the bottom line result is not (or is no longer relevant) because the legal landscape has changed with the issuance of the Treasury regulations,” said Horowitz. “This point was already made in the Federal Circuit's Grapevine decision.”
He explained that the Salmon Ranch ruling addresses both the issue of when the extended six-year statute of limitations comes into play and, more importantly, the broader question of the government's ability to change the law by issuing new Treasury regulations that apply to prior tax years. “There is a strong possibility, however, that the Supreme Court will address these questions next year, in which case the Salman Ranch decision, itself, will just become a historical footnote,” Horowitz said.