## Facts

- Hubert and his wife filed joint federal income tax returns for 1982 (filed April 1983) and 1983 (filed April 1984).
- The returns reflected items tied to three tax shelters: Atolia-WMD Project, Oxford Partners (Oxford), and Dore.
- In November 1985, the IRS sent Hubert a letter with the heading “Atolia-WMD Project,” stating the IRS was examining an entity in which Hubert had an interest and that the statute of limitations for assessing additional tax would expire before the examination could be completed.
- The IRS asked the Huberts to sign Form 872-A for 1982 to extend the assessment period and stated it would issue a notice of deficiency if they did not sign.
- The Huberts signed Form 872-A for 1982. The form stated they waived the limitations period as to “any Federal income tax due on any” 1982 return.
- The Huberts returned the signed 1982 Form 872-A with a cover letter headed “re: Atolia-WMD Project.”
- In November 1986, the IRS and the Huberts exchanged similar correspondence and executed a similar Form 872-A relating to the 1983 return.
- In December 1988, the Huberts consented to additional assessments: for 1982, adjustments relating to Atolia-WMD, Oxford, and Dore; and for 1983, adjustments relating to Oxford and Dore.
- In 1991 and 1992, Hubert challenged the Oxford and Dore assessments as time-barred, arguing the Forms 872-A extended the limitations periods only for Atolia-WMD because the correspondence referenced Atolia-WMD.
- Hubert paid the tax, sought an adjustment (refund) administratively, the IRS rejected it, and Hubert filed a federal tax refund suit.
- At the bench trial, Hubert testified he believed the consents were limited to Atolia-WMD, while the IRS presented testimony that the Forms 872-A were intended to extend the limitations periods for the full years’ liabilities.

## Issues

1. Whether a Form 872-A extending the time to assess “any Federal income tax due on any” return for a given year extends the assessment period for all items for that year.
2. Whether headings and surrounding correspondence referencing the Atolia-WMD Project limited the scope of the otherwise broad Forms 872-A so that later assessments relating to Oxford and Dore were untimely.

## Decision

- The court held that the Forms 872-A extended the statute of limitations for assessment for the 1982 and 1983 tax years as to the Huberts’ federal income tax liability for those years, not just Atolia-WMD items.
- The court rejected the argument that the Atolia-WMD headings or transmittal letters restricted the scope of the signed Forms 872-A.
- Because the limitations periods were validly extended, the IRS’s assessments relating to Oxford and Dore were timely.
- The court denied Hubert’s refund claim.

## Legal Principles

- A consent to extend the assessment period is construed from the executed written terms; clear, broad language governs absent an express restriction in the consent itself.
- Form 872-A language extending the period for “any Federal income tax” for the specified year is a general extension covering all return items for that year, unless the form contains limiting language.
- References in subject lines, headings, or cover letters to a particular audit target do not, by themselves, narrow an unqualified extension agreement.
- A taxpayer’s unilateral, subjective understanding cannot rewrite an unambiguous written consent.

## Conclusion

Hubert held that the Huberts’ Forms 872-A, which waived the limitations period for “any Federal income tax due” for 1982 and 1983, were general extensions that allowed timely assessments for Oxford and Dore even though related correspondence referenced Atolia-WMD; the court therefore denied the requested refund.


Hubert v. Internal Revenue Service, 96-2 USTC ¶ 50523 (1996)