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Estimated payments but returns never filed

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    #1

    Estimated payments but returns never filed

    My client has not filed for 2003 tax year. He made an estimated payment of 2,000 on 4/16/03, 2,000 on 7/17/03 and 1,000 more on 4/15/04 for a total of 5,000. We are going to file the return this week. When I pulled up his transcript for 2003 on 1/18/10 it says "Credit balance cleared because time to claim refund expired." I know that if he is due a refund for 2003 that he will not get it but what if he owes 10,000. Will they not offset the 5,000 he already paid leaving a balance due of 5,000 because the claim has expired. Has anyone experienced this before? Is it possible to fight the IRS on this.

    They removed the credit once before on 6/25/07 then they reinstated it on the same day. Then they removed it again on 1/18/10.

    Thanks!

    GTS1101
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    #2
    It's good that theIRS knows there are estimated deposits made. Filing the returns and claiming the payments should not be a problem, theIRS will reinstate up to the amount of the tax. Now I did say 'should' not be a problem, lucky for the client they have you to resolve it if it doesn't go right. You might want to anticipate that possiblity and prime the client for the additional fees for you to handle it if need be or add a little to your prep fee now for that contingency.
    "A man that holds a cat by the tail learns something he can learn no other way." - Mark Twain

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      #3
      Wow, 2003? Did they file every year since?

      I had a new client walk in my office a few years ago and tell me he hadn't filed for 4 years. Just like your client, he had made the estimated tax payments for each of those years (which to me is mind boggling). We did the taxes and they recognized all of his estimated tax payments perfectly. Since they recognize the payments, I'm sure they'll recognize them when you do the return.

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        #4
        There's no reason the t/p would not be able to claim the estimated payments made. It would be the same if they had had withholding done from a w-2 or 1099R. If the year is closed, they would not receive a refund.
        You have the right to remain silent. Anything you say will be misquoted, then used against you.

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          #5
          If they have

          refunds you will not get them for the years expired. I tried to roll the refunds forward to more current years they would not let me!!!

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