Sol

[Black Bart]

This doesn't refer to the sun or to that teenage situation in which I once occasionally found myself, but rather to IRS' statute of limitations. For some reason, I can't ever pemanently remember this.

Case: My client has refunds coming if I do amended returns for the last three years ('03-'04'-'05). Question: Can we only get the refunds for two even though he's owed three? I was thinking that's the case (although I seem to remember that it was three at one time). But anyway, if we CAN get three, since '03 which was due 4-15-04 expires on 4-15-07, then I have to get that done here in the next month and a half and I've gotta get crackin'.

Two years? Three years? Thanks.

[JoshinNC]

Three years from the time the original was considered filed

So, the 2003 is eligible up until 4/15/07. Get crackin'.

[thomtax]

But anyway, if we CAN get three, since '03 which was due 4-15-04 expires on 4-15-07, then I have to get that done here in the next month and a half and I've gotta get crackin'.

You are correct, sir, about the three years. Also, keep in mind that if you are in a time pinch, file the oldest one, because of the time deadline and then you can file the other two years after April 17, when you still have another year or two before deadline.

LT

[GIMoe]

3 is the magic number....

Two years? Three years? Thanks.

See the following link: http://www.irs.gov/taxtopics/tc308.html

Which states:

Generally, to claim a refund, Form 1040X must be received within 3 years from the date you filed your original return or within 2 years from the date you paid the tax, whichever is later.

So, 2003 would be due by 4/16/2007 (15th falls on a Sunday)

[Black Bart]

Thanx Moe, Thom, Josh

Gotcha. But still, isn't there something in there somewhere about situations where IRS could refuse to pay more than two years back (I keep thinking I saw that somewhere)? Or was that if a return had never been filed at all?

[jainen]

The rule is

>>IRS could refuse to pay more than two years back <<

The rule is three years after due date, OR two years after payment. For example if you paid 2001's bill three years late (on 4/15/05), there is still time to claim a refund for 2001 (up to the amount of that late payment).

Also, don't forget that some states give you four years to amend.

[Bird Legs]

Prior Year Refunds-Question

What caused these refunds from prior years?

[Black Bart]

Well, actually

What caused these refunds from prior years?

it didn't have anything to do with IRS (will explain in a minute) -- I will be amending for the state. Had a young, TurboTaxing, upwardly mobile (I think that's what they used to call them) hotshot come in Saturday to ask about his '06 TT calcs. Chief complaint -- paid AR only $500 last April, but now it's $2,200 and "Why?"

In AR it's almost always best to file separately if both spouses make big dough (like in his case). He said he'd heard that before, but always files jointly on TT anyway (see--the program's $50 or so and he beats those outrageous tax prep fees). Had '05 with him -- it's joint; the $500 paid should have been a refund. Told him I'd fix all (he's done three) for $100 each -- funny, young cheapskates aren't as plentiful as older ones, but this twenty-something kid was sweating bullets: "Jeez! $100 bucks? Still...I guess...if I net $900..." Kinda reminded me of notoriously tight comedian Jack Benny confronted by a gun-wielding robber demanding "Your money or your life" -- Benny replies "I'm thinking it over."

Anyhow the thing about IRS was that I did a couple's old (non-filed since '99) returns last summer and I remembered something about IRS refusing to pay more than two years for some reason. I've seen three-year loss carrybacks, but I read something about two years somewhere. Guess I'll just have to dig up/out that guy's old IRS correspondence, wherever it may be, to satisfy my curiousity.

[jainen]

using Form 3115

>>I read something about two years somewhere<<

If he has treated an item of income as non-taxable (by not filing a return) for more than two years, he has established an accounting method for that item and can't change it without IRS consent using Form 3115.

[Black Bart]

Aw, don't be so picky about it.

If he has treated an item of income as non-taxable (by not filing a return) for more than two years, he has established an accounting method for that item and can't change it without IRS consent using Form 3115.

The IRS clerks at St. Louis have never heard of 3115 and it's not my duty to educate them. Besides those '99 guys always treated all their income as non-taxable.

[jainen]

jumpin' on me

>>don't be so picky<<

Why are you jumpin' on me? I was just trying to spice up your thread with one of them ridiculous-but-almost-true controversies, since everything else was falling flat because none of us has a clue what you are talking about.

[Black Bart]

Aw, don't be so sensitive.

I didn't mean anything by that; I was just firing back at your slapping me with one of those little-known and never-utilized rules that you specialize in astounding the masses with.

But anyway, you always spice up a thread and it's nice to hear from you.

Clueless -- guess you're right about that. I don't know what it is about that two-year thing that's bugging me. I guess I really will look it up when I get time.

Yuk-yuk. I saw where Louie Moped indirectly accused you of...ahem...racial insensitivity back there for not believing right off that the cafe folks were working for fun and faith. I couldn't decide myself on the answer to that one. I thought Margaret was asking the question sincerely, but I don't see how anybody, ethnic or otherwise, can work from August 'til now without pay and without catchin' on that...hmmm...are taxes due...not due? Still, if they're refinancin' the house for payroll taxes, you have to admit that's the strongest of evidence (assuming the money is actually used for it) that they are on the up and up -- although I wonder what happened to all that cash between now and last August? Oh well...by the way, Paul dissed me about sump'n a while back (I forget what), but Brad refused to have him hung or shot (I forget which), so, if misery loves company, you're in good company.

[jainen]

can't say no

>>they're refinancin' the house for payroll taxes<<

Yeah, I do admit that shook me up a little. Then I 'membered that a good con always uses some dramatic action to distract from what's actually going down.

Restaurants gotta be one of the most regulated businesses imaginable. Everybody from the parking commissioner to the director of homeland security wants a piece of the action. But these college kids skipped some of the most basic planning steps -- and then fired their manager for not being organized enough! It just doesn't make sense as a legitimate business, but it does make sense as a cash cow.

As for the refi, it is worth noting that they aren't relying on restaurant profits to qualify for or repay it. As you suggest, they might use the money for any other scheme, but I think they will bring the payroll tax up to date. Restaurants always have high turnover, especially when nepotism controls the shift schedule. One UIB claim would bring the state boys around PDQ, but a quick infusion of exceedingly traceable cash will keep the cow alive for a whole another year. Of course, the old CPA isn't up for any more veterinary services, so like all good cons they're looking for a friend who can't say no.