Does anybody know of a model form to use for a protective refund claim?
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Evan Appelman, EA -
Form 1040X with "Protective Claim" written on top of page 1 works for me. Remainder of form filled out as usual.Originally posted by appelman View Post -
There's a checklist in Pub. 17. Pay attention to the "identify contingencies" and "clearly alert" bullet points.Comment
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never heard of this
This is why I love this message board so much. I learn something new all the time. I've been doing income taxes since the mid-80's and never heard this term before.
What is it?
Linda, EAComment
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See Pub. 566
Under "Time for Filing a Claim for Refund."Evan Appelman, EAComment
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That would be Pub. 556. Put simply, a protective claim stops the clock on the deadline for filing for a refund if there's pending litigation, legislation, or a regulation change that could improve your situation.
Obviously any tax case before a federal Court of Appeals that could set or change precedent concerning matters of law is a potential reason for a protective claim. The most obvious case right now (at least in my area) is the Gill case, which could allow same-sex married couples to file jointly, exclude currently imputed income, etc. Anyone who was in a same-sex marriage in 2007 and filed a federal return should consider whether it's appropriate to file a protective claim before the amendment deadline this year, taking into account both the possible advantages and disadvantages (e.g. if it would result in a change from single or HoH to MFS), as well as the disadvantage of keeping the return open for audit for an extended period.
Finally, check some of the cases. I have a vague recollection of seeing a protective claim denied because it failed to clearly identify the issues. It can't hurt to include a statement with a protective claim that identifies the pending litigation (or other issue) and specifically what items will change, even though an exact dollar amount isn't required.Comment
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