Refund on 2006 Return on Extension

[SFBOB]

I know that to get a refund on an amended return:the amended return must be filed within 3 years of the due date.Example 2006 was due 4-15-07 and on extension until 8-15-07.

New client came to me with an UNFILED 2006 return and copy of extension filed by a deceased tax preparer.I would have needed to file by 4-15-10 to be within the 3 year staute as I see it Will the filed extension give me until 8-15-10? This would give the client a nice refund, or is it lost due to the late filing?Thanks for your comments. Have a good day Bob

[Roberts]

As long as you are sure the extension was filed and received by the IRS, I would think you should be able to file the return. If they never filed a return originally, you don't need to amend it.

Just keep in mind, this could have other ramifications if the estate is closed. When you say it could result in a nice refund, keep it in mind whether it will result in more fees than refund. As an example, if they had an estate / trusts handled by an attorney, it could easily generate several hundred dollars in legal fees to deal with this.

[SFBOB]

The Tax Preparer is deceased, not the client. Sorry for the confusion.

[Roberts]

The Tax Preparer is deceased, not the client. Sorry for the confusion.

Oh - my fault. Then I think you have a few more days to work on it.

[SFBOB]

Thanks I will file the return and caution the client that the refund could be in question do to this late date. Thanks for your info. Have a good one Bob

[JON]

I am missing something?

An extesion for a return NOT filed timely-I do not think that extends anything. Good idea on giving the caution, I think.

[OtisMozzetti]

I believe federal SOL has expired

Will the filed extension give me until 8-15-10? This would give the client a nice refund, or is it lost due to the late filing?

Since the return wasn't filed during the extension period, my interpretation is that the return must be filed by the original due date (4/15/2007) plus 3 years = (4/15/2010)--statute of limitations-- in order to succesfully claim any federal refund on the 2006 return. Moreover, since no 2006 return has yet been filed, the IRS would likely hold up refunds from other years until they see the 2006 return even though it apparently will turn out claiming that there was no tax due. It is in the client's interest to get the 2006 tax return filed soon, for that reason and also just to make more certain that there was no balance due from way back there.

One happy sidelight is that the state of California, where apparently your client lives, has a 4 year statute of limitations, not the 3 year statute as with federal tax.

The earlier posters who suggested to tell the client "don't count on any refund" may have had a good way to handle the situation.

[SFBOB]

Thanks for all the input.I has not aware of Califonia being on 4 year grace period. Thanks

[OtisMozzetti]

explanation of California Statute of Limitations

A good, precise, explanation of California's 4-year statute of limitations can be read at www.ftb.ca.gov/law/summaries/SOL_Refund.pdf.

[SFBOB]

Thanks Otis. Have a good one.