Amend 2003's - too late?

[Jesse]

New client is in a financial mess. Purchased a charitable annuity in 2003 which is being investigated w/ Dept of Financial Institutions. Lawyer sent letter which states:

"Finally, because the annuity was purchased in 2003, you would still be within the four-year time frame to amend your 2003 tax returns to take a charitable deduction."

Earlier in the season I told him three years to file a claim for a refund, so this AM he brought the letter from the lawyer and it indeed advises four years.

Am I counting wrong? Or would there be an exception to the three year period?

[Lion]

State?

Some states are four years. At federal level, there are some exceptions to do with securities. Ask the lawyer for a cite.

[Bill Tubbs]

Federal or State (or both?)

New client is in a financial mess. Purchased a charitable annuity in 2003 which is being investigated w/ Dept of Financial Institutions. Lawyer sent letter which states:

"Finally, because the annuity was purchased in 2003, you would still be within the four-year time frame to amend your 2003 tax returns to take a charitable deduction."

Earlier in the season I told him three years to file a claim for a refund, so this AM he brought the letter from the lawyer and it indeed advises four years.

Am I counting wrong? Or would there be an exception to the three year period?

Fed = 3 years. Wisconsin = 4 years. Perhaps lawyer was thinking of your state's SOL. What state are you in?

[les grans]

File the amended 2003 return by this Tuesday, 04-15-08, and when IRS refuses to refund the resulting overpayment, because the federal statute of limitations on refunds is three years, send the lawyer a really ugly letter and demand that he pay for your client's next vacation in Tahiti. Whom does the lawyer represent? What're the *income tax* issues with the charitable annuity? Who's fighting whom over what?
FYI, if this were to turn out to be a bad debt or securities loss, the taxpayer would have seven years to amend his return and get a refund.

[Jesse]

File the amended 2003 return by this Tuesday, 04-15-08, and when IRS refuses to refund the resulting overpayment, because the federal statute of limitations on refunds is three years, send the lawyer a really ugly letter and demand that he pay for your client's next vacation in Tahiti.

I like that idea.

Thanks all, I am in Wisconsin so that is 4 years, however w/ Wisconsin "floating" standard deduction it will not pay to amend Wisconsin. Federal could receive extra refund.

>>What're the *income tax* issues with the charitable annuity? Who's fighting whom over what? <<

This I have not received all the details, I think the client was scammed into some type of charitable trust that was sold as an investment of some sort. New client came late and we'll be filing an extension to try to get 2007 on track.

>>FYI, if this were to turn out to be a bad debt or securities loss, the taxpayer would have seven years to amend his return and get a refund.<<

This I am aware of and if it turns out we can file an amendment in this case we don't have to rush into it before Tuesday!

Again thanks all for confirming my fuzzy thinkin'!