The Seventh Circuit Court of Appeals ruled yesterday thatthe Internal Revenue Service can still apply a two-year deadline to taxpayerslooking to file for "innocent spouse" relief.

The court reversed a previous Tax Court ruling, whichheld that because the statute did not specify a particular deadline for filing,the IRS could not impose one.

In the court's opinion, Judge Richard A. Posner wrote,"The Tax Court's basic thought seems to have been that since some statutes(in this case, some provisions of a statute) prescribe deadlines, whenever astatute (or provision) fails to prescribe a deadline, there is none. That isnot how statutes that omit a statute of limitations are usually interpreted.Courts 'borrow' a statute of limitations from some other statute in order toavoid the absurdity of allowing suits to be filed centuries after the claim onwhich the suit was based arose."

 The court's full opinion is available here.

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