Amend 07 return to remove HOPE credit, so I can take this year?

[WhiteOleander]

That is not what I said.

Well, tell us what you did say.

[RitaB]

This is better than a movie

I just broke out a bag of popcorn.

OK, sorry, carry on.

[Bees Knees]

Section 6501(a) provides that, with certain exceptions, the amount of any tax imposed by title 26 shall be assessed within three years after the return was filed, whether or not the return was filed on or after the dated prescribed for its filing.

Nobody has disputed the fact that the IRS has 3 years to assess any tax after a return is filed. But one would think assessing of tax is done by the IRS, not the taxpayer.

However, as pointed out, Letter Ruling 201052003 interprets this code section to also apply to the taxpayer assessing any additional tax after the return has been filed. It says in part:

Since Taxpayer’s Form 1120X and its accompanying payment was received by the Service after the expiration of the statute of limitations for assessment, the amount of the payment is an overpayment pursuant to section 6401(a), which entitles Taxpayer to an offset or refund under section 6402(a). See Rev. Rul. 85-67.

So thanks NYEA for providing a citation that solves the issue. I did not know the 3 year statute for assessing additional tax applies to both the IRS and the taxpayer. That would mean the strategy proposed by the original poster to amend a 2007 return to undue the Hope Credit does not appear to work, as the payment of the additional tax on such an amendment would be treated as an overpayment.

[ChEAr$]

Try §6501(a) as the cite - tax may be assessed only within the three year period after the return is filed. Also look at ILM 201052003 - the discussion might be helpful.

For ChEAr$ - you can file an amended return at any time but that doesn't mean it will have an impact. The only time a "late" amended return would be helpful is to reduce a liability that exists and has not been fully paid as of the time of the amended return. The 3 year statute for assessment applies to both the IRS and the taxpayer.

Just to set the record straight, I've never advocated or recommended to a client to amend outside the three years. Only a couple of clients that I can recall wanted to do it in order to come clean (and sleep at night? grin). Maybe it's a Southern thing, you reckon?

At any rate, I prepared the 1040x's and the deeds were done. In both cases IRS cashed the checks and we heard nothing further from it. Now these two cases were a long time ago, probably in late 1980's. Maybe the word (above) just wasn't out back then. LOL