Alan Horowitz comments on Fifth Circuit's decision that that an overstatement of basis on a tax return does not constitute omission from gross income and that the IRS is barred from assessing unpaid taxes beyond a three-year statute of limitations in such cases. Horowitz said the IRS no longer has the opportunity to resolve the section 6501(e) issue in its favor without Supreme Court review, following the Fourth and Fifth Circuits' decisions this week. "After Beard, the government might have entertained the hope that it could turn the issue around in the other courts, but that's now gone," he said. The government could seek certiorari and might relish that opportunity because "the Supreme Court is likely to be freer to adopt a narrow construction of Colony," he said. Because the IRS needed only one appellate win to make a strong case for Supreme Court review, additional decisions going against the government's position won't necessarily be harmful to it in the long term if the Supreme Court hears the case, he said. Asked to hazard a guess on the likelihood of certiorari being granted, Horowitz, a former Tax Assistant to the Solicitor General at the Justice Department, said that "the government has a lot of money at stake in these cases, which could be enough to attract the Supreme Court's attention."