United States v. Home Concrete & Supply, LLC, 132 S. Ct. 1836

Taxpayers filed returns in April 2000 that overstated basis in sold property, thereby understating gain.
The understatement of gross income from the sale exceeded the 25% threshold for § 6501(e)(1)(A).
The Commissioner asserted the deficiency within the extended 6-year period but after the ordinary 3-year period.
Colony, Inc. v. Commissioner held that overstatements of basis do not fall within the § 6501(e)(1)(A) extension.
The Government argued that § 6501(e)(1)(A) should be read in light of the 1954 Code and a later regulation § 301.6501(e)-1, which would treat the understated gross income as an omission.
The Court held that Colony controls and the extended period cannot apply to overstatements of basis; the regulation cannot override Colony; taxpayers prevail on the central issue.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether overstatement of basis triggers the 6-year extension	Colony controls; overstatements of basis do not omit gross income.	Regulation and 1954 amendments suggest extension may apply.	No; extended period does not apply to overstatements of basis.
Whether the 1954 Code and contemporaneous amendments change Colony’s interpretation	Colony remained controlling under stare decisis.	New provisions could alter meaning and permit gap-filling.	No; Colony governs despite amendments.
Whether Treasury Regulation § 301.6501(e)-1 is a permissible agency interpretation	Colony forecloses agency reinterpretation.	Agency may fill gaps when statute is ambiguous.	No; regulation cannot override Colony’s interpretation.

Colony, Inc. v. Commissioner, 357 U. S. 28 (U.S. 1958) (overstatements of basis do not trigger § 6501(e)(1)(A) extension (ambiguous language))
Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 (U.S. 1984) (agency gap-filling deference when statute is ambiguous)
National Cable & Telecommunications Assn. v. Brand X Internet Services, 545 U. S. 967 (U.S. 2005) (pre-Chevron ambiguity and agency deference framework)
Mead Corp. v. United States, 533 U. S. 218 (U.S. 2001) (clarifies when agencies may fill gaps under Chevron)
John R. Sand & Gravel Co. v. United States, 552 U. S. 130 (U.S. 2008) (stare decisis considerations in statutory interpretation)
Patterson v. McLean Credit Union, 491 U. S. 164 (U.S. 1989) (statutory interpretation principles)
Uptegrove Lumber Co. v. Commissioner, 204 F.2d 570 (3d Cir. 1953) (pre-Colony dispute on omission concept)
Reis v. Commissioner, 142 F.2d 900 (6th Cir. 1944) (early interpretation of omission from gross income)