Intent-to-Evade Without the Taxpayer:
Murrin v. Commissioner of Internal Revenue and the New Scope of § 6501(c)(1)

I. Introduction

In Stephanie Murrin v. Commissioner of Internal Revenue, No. 24-2037 (3d Cir. Aug. 18, 2025), the United States Court of Appeals for the Third Circuit confronted a deceptively simple question with far-reaching implications for tax administration: Whose intent matters when the IRS relies on the “false or fraudulent return with the intent to evade tax” exception to the ordinary three-year assessment period?

Ms. Murrin, an individual taxpayer, undisputedly underpaid taxes for 1993-1999. The culprit, however, was her return preparer, Duane Howell, who inserted fraudulent items with the intent to evade tax. Murrin herself possessed no such intent. Over two decades later, the IRS issued a notice of deficiency, invoking 26 U.S.C. § 6501(c)(1) to bypass the statute of limitations. Murrin argued that the indefinite limitations period is triggered only by taxpayer fraud, not a third party’s. The Tax Court rejected that view, and the Third Circuit has now affirmed, effectively widening the reach of § 6501(c)(1) in its jurisdiction.

II. Summary of the Judgment

• Holding: The phrase “false or fraudulent return with the intent to evade tax” in § 6501(c)(1) does not require the taxpayer’s own intent. Fraudulent intent by any person involved in the preparation or filing of the return suffices; the IRS may therefore assess tax “at any time.”
• Disposition: Judgment of the Tax Court affirmed. Murrin remains liable for the underlying tax, accuracy-related penalties, and interest.
• Methodology: De-novo review of statutory interpretation; analysis focused on text, structure, context, and precedent, with heavy emphasis on Congress’s use of the passive voice and comparative provisions within the Internal Revenue Code (IRC).

III. Detailed Analysis

A. Precedents Cited and Their Influence

1. Badaracco v. Commissioner, 464 U.S. 386 (1984)
   – Reinforces that § 6501(c)(1) must be strictly construed in the government’s favor and that once triggered it operates “at any time.” The Third Circuit borrowed Badaracco’s emphasis on “unqualified language” to reject a taxpayer-only limitation.
2. Bartenwerfer v. Buckley, 598 U.S. 69 (2023)
   – Although a bankruptcy case, it offered a fresh Supreme Court exposition on passive-voice statutes. The Court there held that “obtained by … fraud” does not specify whose fraud, signaling that Congress can intentionally leave the actor unspecified. The Third Circuit analogized § 6501(c)(1)’s wording to Bartenwerfer.
3. Asphalt Industries, Inc. v. Commissioner, 384 F.2d 229 (3d Cir. 1967)
   – Distinguished: concerned imputation of an officer’s embezzlement to a corporate taxpayer and did not squarely decide the actor issue under § 6501(c)(1).
4. City Wide Transit, Inc. v. Commissioner, 709 F.3d 102 (2d Cir. 2013)
   – Offered supportive dicta that a preparer’s fraud could extend the limitation period; cited to show inter-circuit trend.
5. BASR Partnership v. United States, 795 F.3d 1338 (Fed. Cir. 2015)
   – Directly conflicts; Federal Circuit held intent must be the taxpayer’s. The Third Circuit respectfully declined to follow BASR, noting Bartenwerfer and statutory-context analysis.

B. Statutory Context & Comparative Provisions

The court highlighted Congress’s deliberate drafting differences within adjacent Code provisions:

• § 6501(a) – The base three-year period explicitly ties “the return” to “the taxpayer.”
• § 6501(c)(1) – Uses passive construction, omitting “taxpayer,” indicating no actor limitation.
• §§ 6663, 6664(c)(1), 7454(a) – Fraud and penalty provisions that do specify “taxpayer,” showing Congress knows how to cabin liability when desired.
• § 6161(b)(3) – Mirrors § 6501(c)(1) by denying payment extensions where any fraud “with intent to evade tax” exists; again no actor is designated.

C. Court’s Legal Reasoning Step-by-Step

1. Plain Meaning: Dictionaries from the 1918 era (when the predecessor statute was enacted) reveal that neither “intent” nor “evade” carries an intrinsic subject. Therefore, attaching fraud to “return” is sufficient.
2. Grammatical Structure: Passive voice (“false or fraudulent return with the intent to evade tax”) purposely removes the actor, echoing the Supreme Court’s interpretation in Bartenwerfer.
3. Congressional Choice of Words: Where Congress wanted a taxpayer-specific limitation, it said so elsewhere; its silence here is presumed intentional (expressio unius / negative implication reasoning).
4. Policy Coherence: Congress differentiates between (a) collecting the right amount of tax—where any fraud should keep the door open for assessment—and (b) punishing the taxpayer—where penalties require the taxpayer’s own culpability.
5. Precedential Support & Strict Construction: Following Badaracco, ambiguity in a limitations statute is construed in favor of the IRS, not the taxpayer.

D. Impact Assessment

• Expanded IRS Reach in the Third Circuit – Taxpayers who relied on unscrupulous or merely careless preparers may face assessments decades later.
• Forum Shopping and Circuit Split – A clear split now exists between the Third and Federal Circuits; taxpayers litigating refund suits in Court of Federal Claims (appealable to the Fed. Cir.) may achieve different outcomes than deficiency cases (appealable according to residence).
• Compliance & Due Diligence Pressure – Sophisticated taxpayers and advisers in the Third Circuit must strengthen engagement letters, due-diligence procedures, and perhaps procure preparer-fraud insurance.
• Potential Supreme Court Review or Legislative Fix – The stark interpretive divide and large revenue stakes (long-dormant years become collectible) create fertile ground for certiorari or congressional clarification.
• Penalty Segregation Maintained – The decision preserves distinction between fraud penalties (taxpayer culpability needed) and assessment of the correct tax (any actor’s fraud suffices).

IV. Complex Concepts Simplified

Assessment vs. Notice of Deficiency

The IRS cannot immediately “assess” (enter on its books as a legally enforceable debt) additional tax. It must first mail a Notice of Deficiency. If the taxpayer files in Tax Court, the assessment is frozen until the case ends.

Statute of Limitations (§ 6501)

Ordinarily three years from filing. Twelve enumerated exceptions extend or eliminate the period; § 6501(c)(1) is the most draconian (“at any time”).

Passive-Voice Drafting

A sentence like “tax may be assessed” omits the actor, intentionally broadening scope to whoever caused the triggering event.

Accuracy-Related Penalty (§ 6662)

A 20 % civil penalty for negligence or substantial understatement, distinct from the 75 % fraud penalty (§ 6663). Murrin stipulated to this lesser penalty.

In Pari Materia

A canon that identical words in related statutes usually carry identical meanings, unless context clearly indicates otherwise. The Third Circuit found context did indicate otherwise here.

V. Conclusion

The Third Circuit’s ruling in Murrin definitively answers, for its jurisdiction, who must possess fraudulent intent to activate the unlimited assessment period of § 6501(c)(1): anyone whose actions render the return “false or fraudulent.” By anchoring its interpretation in textual grammar, comparative statutory structure, and modern Supreme Court guidance on passive-voice statutes, the court parted company with the Federal Circuit and realigned with the Tax Court’s post-2007 jurisprudence.

Practically, the decision imposes a heightened vigilance on taxpayers to monitor their agents and preparers, underscores the IRS’s ability to reach back indefinitely where fraud lurks, and positions the Supreme Court or Congress as the next arbiters of uniformity. Until then, the new precedent stands as a warning: a taxpayer’s innocence does not restart the clock when someone else cooks the books.