Can you help me get this Unfortunate Lady some Refunds?

[LCP]

Lady walks in the office yesterday morning with all of her W-2's dating back to 2000.

Her husband walked out on her and her three kids in 2000 and she didn't think she was able to file without him. She didn't realize she could file as H of H.

With the EIC she would have had some pretty big refunds....... $2k to 3k per year in the early years. Unfortunately, in the later years its about a break even.

How far back does she have a hope of collecting refunds.... two years?

Any value in filing the early years with an attachment explaining her problem?

Any advantage in filing those early years (perhaps gradually) and applying refunds to the next year?

TIA

[Bees Knees]

How far back does she have a hope of collecting refunds.... two years?

The statute of limitations for filing for a claim of refund is 3 years from the due date of the return. There is no exception for reasonable cause.

Any value in filing the early years with an attachment explaining her problem?

All that will do is add another letter to the lunch room bulletin board at the return processing center for IRS employees to get a chuckle at.

Any advantage in filing those early years (perhaps gradually) and applying refunds to the next year?

Been there. Already tried that…it doesn’t work.

You can’t undo the 3 year statute of limitations by applying the refund to an open year.

[LCP]

The statute of limitations for filing for a claim of refund is 3 years from the due date of the return. There is no exception for reasonable cause.

All that will do is add another letter to the lunch room bulletin board at the return processing center for IRS employees to get a chuckle at.

Been there. Already tried that…it doesn’t work.

You can’t undo the 3 year statute of limitations by applying the refund to an open year.

Why did I think that the IRS would only go back two years for refunds?

[DaveinTexas]

Playing devil's advocate

[QUOTE=Bees Knees;45943]The statute of limitations for filing for a claim of refund is 3 years from the due date of the return. There is no exception for reasonable cause.

The period of limitation for filing a claim for refund is suspended while the taxpayer is unable to manage financial affairs because of a disability. IRC 6511(h) and page 15-4 of The Taxbook.

In this case, the refunds are gone forever. It's a shame that the IRS has 10 years or longer, in some circumstances, to collect from us.

[Jay Lode, CPA]

[QUOTE=DaveinTexas;45946]

The statute of limitations for filing for a claim of refund is 3 years from the due date of the return. There is no exception for reasonable cause.

The period of limitation for filing a claim for refund is suspended while the taxpayer is unable to manage financial affairs because of a disability. IRC 6511(h) and page 15-4 of The Taxbook.

In this case, the refunds are gone forever. It's a shame that the IRS has 10 years or longer, in some circumstances, to collect from us.

Unfortunate situation; A glaring example of the inequity in the tax code. It isn't logicle, it is social purpose.

Davein Texas....your circ 230 disclaimer is absolutely hillarious - and right! Can I borrow it form you??
Jay

[Jesse]

Don't overlook the state statute of limitations, you might get an extra years refund from your State even though you can't for the Federal.

[DaveinTexas]

[QUOTE=Jay Lode, CPA;45948]

Davein Texas....your circ 230 disclaimer is absolutely hillarious - and right! Can I borrow it form you??
Jay

Jay, unfortunately, my disclaimer is registered as patented tax advice....just kidding; go ahead and use away.

[Black Bart]

Well, I don't know, but

Why did I think that the IRS would only go back two years for refunds?

I'm like you -- that was my impression. I've seen and/or heard that somewhere (seems like it was here), too.

[New York Enrolled Agent]

I'm like you -- that was my impression. I've seen and/or heard that somewhere (seems like it was here), too.

The rules on limitations for refund are found in §6511. I'm pasting only a small part of the section - this might clear up why you might be thinking "2" years.

§6511(a) Period of limitation on filing claim.
Claim for credit or refund of an overpayment of any tax imposed by this title in respect of which tax the taxpayer is required to file a return shall be filed by the taxpayer within 3 years from the time the return was filed or 2 years from the time the tax was paid, whichever of such periods expires the later, or if no return was filed by the taxpayer, within 2 years from the time the tax was paid. ...

[BOB W]

So let me get this straight, If a late filed return was filed 2 years late and was getting a refund does he have 2 or 3 years to amend that return?

[ChEAr$]

Logical?

[QUOTE=Jay Lode, CPA;45948]

Unfortunate situation; A glaring example of the inequity in the tax code. It isn't logicle, it is social purpose.


Jay

However if a return is timely filed, IRS only has three years in which to audit it
(unless fraud is involved of course).
Now, is that logical?

[bertrans]

Is it logical

It is logical in that the conclusion flows logically from the premisses, but - is it fair? Then again, what is fair? I have no idea. And that admission scares the bejimminies outta me!

[Kram BergGold]

Waht to file

You can file 2006, 2005, 2004. Returns prior to 2004 can be filed but your client will not get refunds unless she can show an inability to manage her affairs due to a physical or mental condition that has or will last 1 yr or more.