no, not Ft. Duquesne, Ft. Ticonderoga, or Ft. Sumter. I have mentioned before my wonderful new client who did not file from 2004-2008, and the IRS assessed ridiculously high substitute returns (as they always do).
We are refiling 2004-2008 and as it turns out the taxpayer would have had small refunds every year if he had just filed his taxes. However, those refunds are now not refundable because he has waited longer than 3 years. By virtue of his inactivity, he has forfeited those refunds. The best that can happen with those returns is that when filing, he will negate the IRS assessments from substitute returns.
He did file, however, in 2009 and 2010, at the depth of the recession for his industry. Due to EIC, he had large refunds and the IRS took some $8K from him to apply to his assessments from 2004-2008.
My question: what will happen to the $8K the IRS took to satisfy liabilities that didn't exist??
1. Since there was no liability from 2004-2008, the IRS should not have taken his $8K in refunds from 2009-10 and he should get this money back.
2. Since the statute has expired for 2009 & 2010, money applied from those refunds is no longer available to the taxpayer.
3. Even though there was no real liability for 2004-2008, at the time the refunds were applied a substitute liability existed at the time and this was more than 3 years ago, so the situation can no longer bring a refund to the taxpayer.
We are refiling 2004-2008 and as it turns out the taxpayer would have had small refunds every year if he had just filed his taxes. However, those refunds are now not refundable because he has waited longer than 3 years. By virtue of his inactivity, he has forfeited those refunds. The best that can happen with those returns is that when filing, he will negate the IRS assessments from substitute returns.
He did file, however, in 2009 and 2010, at the depth of the recession for his industry. Due to EIC, he had large refunds and the IRS took some $8K from him to apply to his assessments from 2004-2008.
My question: what will happen to the $8K the IRS took to satisfy liabilities that didn't exist??
1. Since there was no liability from 2004-2008, the IRS should not have taken his $8K in refunds from 2009-10 and he should get this money back.
2. Since the statute has expired for 2009 & 2010, money applied from those refunds is no longer available to the taxpayer.
3. Even though there was no real liability for 2004-2008, at the time the refunds were applied a substitute liability existed at the time and this was more than 3 years ago, so the situation can no longer bring a refund to the taxpayer.
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