Individual Statute of Limitations


B

bc

Individual client files 2007 return in December 2009 (late)
requesting refund. Refund received. Client then amends return in
February 2011 for additional refund. Refund received. Return now
in audit.

I know the rule for timely filed returns requesting refunds is
(basically) three years from date of filing or two years from date
of payment, whichever is earlier. As I recall, the rule on amended
returns is that they don't extend the statute unless filed within
the last few months of the original statute, in which case there
is a minor extension to give the Service time to examine the
amendment.

Here we are not requesting a further (third) refund. The Service
will likely be seeking taxes, penalties and interest if we
understand their position (no report received yet). If we are
under the 25% of gross calculation which would extend the statute
to six years, when does their time run out? Is it three years from
original due date (4/15/08)? From the original extended due date
(10/15/08)? From the actual date of filing (12/15/09)? Two years
from something? Does the amendment play any role?
 
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A

Alan

Individual client files 2007 return in December 2009 (late)
requesting refund. Refund received. Client then amends return in
February 2011 for additional refund. Refund received. Return now
in audit.

I know the rule for timely filed returns requesting refunds is
(basically) three years from date of filing or two years from date
of payment, whichever is earlier. As I recall, the rule on amended
returns is that they don't extend the statute unless filed within
the last few months of the original statute, in which case there
is a minor extension to give the Service time to examine the
amendment.

Here we are not requesting a further (third) refund. The Service
will likely be seeking taxes, penalties and interest if we
understand their position (no report received yet). If we are
under the 25% of gross calculation which would extend the statute
to six years, when does their time run out? Is it three years from
original due date (4/15/08)? From the original extended due date
(10/15/08)? From the actual date of filing (12/15/09)? Two years
from something? Does the amendment play any role?
The clock (3 year or 6 year if the 25% of GI is in effect) started to
run when the late filed return was received by the IRS.... 12/15/09.
Amending it in 2/11 does not extend the clock.
 
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D

D. Stussy

bc said:
Individual client files 2007 return in December 2009 (late)
requesting refund. Refund received. Client then amends return in
February 2011 for additional refund. Refund received. Return now
in audit.

I know the rule for timely filed returns requesting refunds is
(basically) three years from date of filing or two years from date
of payment, whichever is earlier. As I recall, the rule on amended
returns is that they don't extend the statute unless filed within
the last few months of the original statute, in which case there
is a minor extension to give the Service time to examine the
amendment.
Only if it's a balance-due amended return, and the extension is 60 days
from the date of receipt (not the date of mailing).
Here we are not requesting a further (third) refund. The Service
will likely be seeking taxes, penalties and interest if we
understand their position (no report received yet). If we are
under the 25% of gross calculation which would extend the statute
to six years, when does their time run out? Is it three years from
original due date (4/15/08)? From the original extended due date
(10/15/08)? From the actual date of filing (12/15/09)? Two years
from something? Does the amendment play any role?
December 2012, because the original return was late-filed.
 

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