If you are in dispute with the IRS as to the underlying tax liability assessed against you or as to a penalty assessed against you, you can file an IRS claim for refund to contest the fact that you owe the tax liability. Unlike Tax Court where you do not have to full pay the tax liability before contesting it, to file a claim for refund, you must full pay the tax liability before filing a claim for refund. However, some taxes are divisible, such as employment taxes, and you only need to pay a certain amount of the tax before filing the claim for refund. You can also contest penalties by filing a claim for refund, and some penalties are divisible. A claim for refund can be made by using form 1040x or form 843.
Statute of Limitations for a Claim for Refund
The statute of limitation for an IRS claim for refund can be somewhat complex. You must file your claim for refund within three years of the due date of the tax return or two years from paying the tax, whichever comes later. If you file a claim for refund after the deadline, the IRS will disallow your claim for refund.
A tax is considered paid when the IRS levies on funds of the taxpayer. Seized property is not considered payment until it is sold. Withheld income tax and estimated tax payments are considered to be paid on the date the tax return is due. Taxes paid through garnishments on wages and assets are considered paid on the various dates the garnishments were applied to the taxes. Payments made through the application of the refund for another year is considered paid when the offset was made.
Protective Claims For Refund
Taxpayers may file protective claims before the expiration of the statute of limitations to preserve their right to make a claim for refund. This can be very important if your claim for refund is contingent upon an IRS audit or Tax Court matter so that you do not lose your right to obtain a refund.
How can a Tax Attorney Help with an IRS Refund Claim?
If you have questions regarding a claim for refund, contact a Los Angeles tax attorney today for a free consultation. If received an IRS audit letter, a tax attorney can help you through the audit process.