The district court had jurisdiction to determine whether the partnerships" lack of economic substance could justify imposing a valuation-misstatement penalty on the partners.
Reversed and remanded, 9-0, in an opinion by Antonin Scalia on Dec 3, 2013.
Issue: (1) Whether Section 6662 of the Internal Revenue Code, which prescribes a penalty for an underpayment of federal income tax that is “attributable to” an overstatement of basis in property, applies to an un”derpayment resulting from a determination that a transaction lacks economic substance because the sole purpose of the transaction was to generate a tax loss by artificially inflating the taxpayer”s basis in property; and (2) whether the district court had jurisdiction in this case under 26 U.S.C. § 6226 to consider the substantial valuation misstatement penalty.
Recommended Citation: United States v. Woods, SCOTUSblog, https://www.scotusblog.com/cases/united-states-v-woods/