No time limit for assessing aiding and abetting penalty.

More than five years after Mullikin, an accountant, had prepared the returns in question, the IRS assessed penalties of about $100,000 against him under IRC section 6701. The section imposes penalties relating to aiding the abetting a tax under-statement.

Mullikin argued in his suit for refund fund the penalty assessments were time barred. The Internal Revenue Code has no specific statute of limitations for either section 6701 penalties or section 6700 penalties (promoting abusive tax shelters). Section 6502, however, has a six-year statute of limitations, which applies to the collection of these penalties once they have been assessed.

The district court held, in Mullikin's favor, that a general five-year statute of limitations on proceedings for enforcement of civil penalties found in 28 United States Code section 2462 barred assessment of the penalties.

Result: The court of appeals held there is no statute of limitations on assessments of section 6701 penalties. Thus, the penalties can be assessed at any time.

* Mullikin (6th Cir., 1991).

Note: Another district court, following the lower court's opinion in Mullikin, held the five-year statute of limitations in 28 USC section 2462 does apply to section 6700 and 6701 penalties [Lamb (DC W. Ark., 1991)].