A Complete Overview of Amended Income Tax Returns
This particular article is written for Tax Attorneys and CPAs. Unless you're ready for an intense intellectual exercise in tax law, I would recommend skipping the details in the article and simply contacting our firm to schedule a free consultation with one of our attorneys by clicking here.
For amended returns, we engage clients on a 50% contingent basis. Here’s how that works. First, we have to recreate the original return, which is easier said than done because this more often than not involves us trying to recreate the mistakes of others. Second, we then make the adjustments that we determine are necessary. Third, we have to print and snail-mail the amended return to the IRS since they do not allow amended returns to be electronically filed. Fourth, when the IRS confirms receipt, we have to contact the processing agent to make the case that the amended return should be approved during a conference call. This is not an easy task. It can take up to 16 weeks for the processing agent to complete their review of the amended return. The IRS typically fights amended returns very aggressively. For that reason, amended returns are an estimated 1,500% more likely to be rejected than regular e-filed returns. Thankfully, there’s no downside. If the IRS rejects the amendment, they simply shred it and the original stays on file as long as the claim was made in good faith with reasonable basis. Lastly, if, after nearly 4 months of going back-and-forth with the IRS, they decide to reject the amended return, then you owe our firm zero; $0. You owe us nothing because we accomplished nothing. That's what a true contingent engagement is.
Submit an online contact form to schedule a free consultation with one of our attorneys by clicking here.
Nevertheless, if you're here to learn, then continue reading.
Introduction
Because oversights and mistakes in the computation of tax liability are inevitable, there are provisions for adjusting the tax for understatements and the recovery of overpayments. Overpayments can be recovered either through administrative proceedings with the Service, or by litigation in court. This right to recover “refunds” is strictly limited by the Code and under common law developed through court decisions.[1] Whether a claim for refund will be successful generally may be determined by applying the following four-part investigation:[2] (1) whether the taxpayer duly filed an administrative claim for refund that complies with the requirements of Section 6511; (2) whether the administrative claim was timely filed within the allowable statutory period; (3) whether the amount of the refund claim asserted exceeds the limitation on amount provisions associated with the applicable limitation period; and (4) whether the taxpayer has satisfied the burden of proof applied to the claim.
Section 6511 contains two sets of provisions related to timeliness. First, that section contains a filing deadline specifying that unless a claim is filed by the taxpayer within 3 years from the time the return was filed or two years from the time the tax was paid, whichever of such periods expires the later,[3] no credit or refund is allowed.[4] Second, the section contains two “look-back periods” which limit recovery. If a claim is filed within 3 years from the time the return was filed, “the amount of the credit or refund shall not exceed the portion of the tax paid within the period, immediately preceding the filing of the claim, equal to 3 years.”[5] If a claim is not filed within that 3-year period, “the amount of the credit or refund shall not exceed the portion of the tax paid during the 2 years immediately preceding the filing of the claim.”[6]
The two timing components of Section 6511 work together.[7] Sections 6511(a) and 6511(b)(1) require only that a taxpayer bring a claim within three years of filing a return or two years of paying the tax, regardless of the return's actual due date.[8] The look-back provisions of I.R.C. § 6511(b)(2), however, limit refunds to taxes paid within the pertinent look-back window.[9]
Refunds and Credits Disregarded for Means Testing for Federal Programs
Beginning in 2010, as a matter of federal law, any refund or advance payment of any refundable credit made to any individual is not taken into account as income or resources, for a period of 12 months from receipt, for purposes of determining the eligibility of the individual (or any other individual) for benefits or assistance under any federal program or under any state or local program financed in whole or in part with federal funds.[10]
Persons Who May File Refund or Credit Claim
Generally, refunds can be obtained only by the person who actually paid the tax.[11] There are a number of exceptions, summarized below.
A claim for refund of an overpayment made by a deceased taxpayer may be filed by the executor, administrator or other fiduciary of the estate. If the decedent left no estate, the refund may be claimed by the decedent's distributees.[12]
As a general rule, minors are required to claim refunds themselves; but if the minor's return was filed by a guardian, the refund claim may be made by either the guardian or the minor.[13]
Refund claims may be filed by agents where they are accompanied by a properly executed power of attorney forms.[14]
Existing corporations generally make claims for refund on their own behalf. For affiliated corporations, the parent corporation acts as agent for the consolidated group. If a corporation is no longer in existence, the successor corporation may file the claim.[15]
As a general rule, partners must file their own separate returns. However, in other matters, the tax matters partner who participates in partnership proceedings acts as agent for the partnership.[16]
A person who involuntarily pays the tax of another can usually recover the entire payment, whether or not the tax was actually due from the person against whom the tax was assessed. A person who voluntarily pays the taxes of another, however, can recover only the amount that constitutes an overpayment.[17]
Where taxpayers filed joint returns, generally the refund is allocated to each spouse according to their respective contributions to the tax payment.[18]
Judgment creditors generally cannot claim a refund for a debtor; but successors in interest by operation of law, such as a bankruptcy trustee, can recover an overpayment of taxes on behalf of a bankrupt taxpayer.[19]
Tax overpayments may be channeled to certain, specified obligations of the taxpayer, rather than being returned as a refund. For example, the Code specifies that the Service may offset the refund against certain specified other liabilities of the taxpayer, such as past-due child support, debts owed to other Federal agencies, and state tax liabilities.[20]
A surety who files a bond or pays the taxes owed by the taxpayer can recover the amount paid to the extent it constitutes an overpayment.[21]
Refund claims may be assigned, but the assignment must be properly executed and witnessed. Assignments by operation of law pass legal title to parties who have beneficial interests in the claim.[22]
Claims for refund or credit are made either in the original return for a taxable year or in a subsequent filing.[23]
If withheld taxes and estimated tax payments made during the year exceed the tax liability for the year, the original return filed for that period can constitute a claim for refund or credit.[24]
If the original return has already been filed, a claim for refund may be filed on a separate form. Individuals seeking a refund file Form 1040X while corporations file Form 1120X. All other taxpayers seeking refunds must file amended returns; for example, fiduciaries who have filed Form 1041 would claim a refund by filing an amended Form 1041. Claims for a refund of taxes other than income taxes are filed on Form 843.[25]
To be a valid refund claim, the return or amended return must contain a statement that there is an overpayment as well as direction to the Service whether the overpayment should be refunded or applied as a credit against the estimated income tax for the year immediately succeeding the refund year. As long as the grounds for the claim are adequately stated, the refund is not limited to the amount stated in the claim.[26]
All claims for refund must be in writing; oral claims are not permitted.[27] A properly executed formal claim is filed on Form 843. In addition, an informal claim that puts the Service on notice of what the taxpayer is claiming and that a claim for refund is being made may constitute a valid refund claim.[28]
The claim must set out each ground upon which the refund is claimed, along with facts sufficient to apprise the Service of the basis of the claim.[29]
The refund claim is a prerequisite to a suit for refund.[30] No suit may be maintained in court for the recovery of an overpayment until a claim for refund has been filed with the Service.[31] All grounds for refund must be raised in the claim, and no new grounds may be raised after the limitations period for filing claims has expired.[32]
Proof of the date of receipt of the claim by the Service is the responsibility of the taxpayer.[33] Generally, the date of the postmark on the envelope is deemed the date of delivery.[34]
Place of Filing
The refund claim should be filed either with the Internal Revenue Service Center in which the tax was paid, the Director of International Operations, or the Assistant Regional Commissioner (Alcohol, Tobacco, and Firearms), depending on the type of tax to be refunded.[35]
Amendments
A claim for refund or credit must state all the grounds for refund sufficiently in the claim. Amendment of the claim to include other or different grounds after the expiration of the statutory period governing claims for refund is not allowed. But amendments merely to correct defects in the claim are possible.[36] Errors as to the year of taxability are also correctible. Prior to the expiration of the statutory period, successive refund claims are permitted.[37]
Generally, no suit or proceeding for the recovery of any tax or penalty can begin before the expiration of six months from the date of filing the claim for refund, unless the Secretary renders a decision within that time, nor after the expiration of two years from the date of filing by certified mail or registered mail by the Secretary to the taxpayer of a notice of the disallowance of the part of the claim to which the suit or proceeding relates. The rejection of a claim for refund starts the running of the statute of limitations for filing suit. The date of the mailing of the notice is deemed to be the date of rejection. The date of rejection bars subsequent amendments of any claim for refund.[38]
Waivers
The Government has authority to waive any objection to the taxpayer's failure to comply with the requirements regarding the sufficiency of the claim. If the Commissioner considers the claim on its merits notwithstanding its form, the Commissioner waives the requirements as to specificity.[39]
All claims must be timely filed. The Commissioner cannot waive this requirement.[40] When the taxpayer and the Government have entered into an agreement extending the period of limitations for assessment of the tax, the period of limitation for filing the claim for refund does not expire until six months after the expiration of the period provided for assessment, provided the agreement was made within the period during which a timely claim could have been filed. The amount subject to refund is limited to the portion of the tax paid after the execution of the agreement and before the filing of the claim, plus the portion of tax that would otherwise be allowed as a credit or refund if the claim had been filed on the date the agreement was executed.[41]
Period for Filing Claims
Generally, a taxpayer's claim for credit or refund is timely if it is filed within three years from the date that the income tax return is filed, regardless of whether the return itself is timely filed.[42] If no return was filed, the claim must be made within two years from the time the tax was paid.[43] There are numerous exceptions to these general rules.
The taxpayer and the Government can enter into an agreement extending the period of assessment, provided the agreement was made within the period during which the timely claim for refund could have been filed. [44]
For claims based on a return, the refund is limited to the amount of tax paid within the three years immediately preceding the filing of the claim.[45]
A refund can be allowed under the mitigation provisions of Sections 1311 to 1315 even though the period of limitations has run out.[46]
The fact that a husband and wife substitute a joint return for separate returns does not affect the limitation period for filing a claim.[47]
In order to be valid, claims must be filed within the period of limitations.[48]
In computing the period of time between the making of the payment and the filing of the claim for refund, the day on which the payment is made is excluded and the day on which the claim is filed is included. Where the last day prescribed for performance falls on a Saturday, Sunday, or a legal holiday, performance is considered timely if made on the next succeeding day which is not a Saturday, Sunday or a legal holiday.[49]
The general limitations periods for refund claims are subject to the following exceptions.
If a claim for refund or credit relates to deductibility of bad debt or a loss due to worthless securities, the period of limitations is seven years.[50]
If the refund claim relates to a net operating loss or a capital loss carryback, the limitations period for making a refund claim is the period ending three years after the time prescribed for filing the return (including extensions) for the tax year of the net operating loss or capital loss carryback. To the extent that an overpayment is due to unused credit carrybacks that arise as a result of the carryback of a net operating loss or a capital loss, the claim may be filed during the period ending three years after the time prescribed by law for filing the return (including extensions) for the tax year of the unused credit that results in such carryback.[51]
Where the taxpayer has been mailed a notice of deficiency and has filed a petition with the Tax Court, no credit or refund generally is allowable, nor may a taxpayer sue in any other court regarding the tax year in question.[52]
If the claim for refund or credit relates to an overpayment attributable to a credit carryback, the period of limitations will be the period ending three years after the time prescribed by law for filing the return for the taxable year of the unused credit which results in such carryback period.[53]
Where there has been a qualified plan termination, the limitations period for making a refund claim is expanded until the date one year after the date on which the recaptured amount is paid to the taxpayer.[54]
Determination of Date of Payment of Tax
Advance payments of tax are considered to have been made on the last day prescribed for payment, without regard to any extension and without regard to any election to pay the tax in installments.[55]
In the case of a tax payable in installments, the overpayment arises only at the point where the payments exceed the total amount determined to be the correct amount of the tax.[56]
If the taxes are paid by check, the date of payment is the date on which the check is received by the District Director rather than the date on which the check is paid by the bank on which it is drawn.[57]
Where more than one tax is due, the delinquent taxpayer can direct to which debt a payment is to be applied.[58]
The date of allowance of a credit or refund is the date on which the scheduling of an overpayment is first authorized by the District Director or an authorized certifying officer.[59]
Credits of Overpayments
The Code gives the government broad discretion to credit overpayments, including interest, against any other outstanding liability on the part of the taxpayer.[60] The method of applying overpayments has been held to be a discretionary right of the Government.[61] Tax liability that is satisfied by the crediting of an overpayment is not subject to any additional interest charge.[62]
In the case of tax payable in installments, overpayments are credited against unpaid installments.[63]
If the taxpayer elects to have an overpayment credited against estimated tax for the following year, it is considered a payment of tax for that year, regardless of whether it is claimed as a credit on that year's return.[64]
In the absence of an agreement between the taxpayer and the Service to apply an overpayment to the deficiency of another taxpayer, a credit can be made only to a deficiency of the same taxpayer who made the overpayment.[65]
Refunds are considered erroneous if made after the time for filing claims expired or, if a claim was timely filed but disallowed, if made after the time for filing suit has expired.[66]
Interest on Overpayments
When a return has been properly filed, interest is paid on an overpayment. The interest runs from the date of the payment to a cut-off point preceding the issuance of the refund check; the Code leaves the designation of the cut-off point to the Secretary, but provides that it cannot be more than 30 days before the date of the refund check.[67] Another provision dispenses with interest entirely if the refund is made within 45 days after the return due date or, for returns filed after the due date, within 45 days of the actual filing date.[68] If a return is filed late (after the due date and any extensions), no interest is paid for any period prior to the date on which the return is filed.[69]
Formerly, the interest rate on overpayments was lower than the rate on underpayments for all taxpayers; for noncorporate taxpayers it was the short-term federal rate plus 2%—as opposed to plus 3% for underpayments. A 1998 Code amendment eliminated this differential, by raising the overpayment rate to a plus 3% increment.[70] For corporate taxpayers, the overpayment rate is the short-term federal rate plus 2%. However, the rate for corporate overpayments in excess of $10,000 is 0.5%.[71] The “Applicable Federal Rates” that are used for these calculations are published quarterly.[72]
Overpayments made in one taxable year, when the taxpayer elects to credit the overpayment to the following year, are considered payments made in the following taxable year, even if such overpayment is in excess of all necessary tax payments for the subsequent year. Therefore, if the taxpayer has a deficiency for the first year, the amount of the interest will not include the overpayment as payment of the deficiency amount.[73]
Quick Refunds
Income tax refund claims of corporations and other taxpayers engaged in business are not usually allowed by the Service without an audit of the returns for the years involved. Since this procedure can take many years, such taxpayers can get prompt refunds in two alternate situations.
Where a corporation expects to have an operating loss that will entitle it to a carryback refund, it can anticipate the carryback by postponing payment of certain tax obligations.[74] The corporation is allowed to make a tentative credit against its unpaid tax for the preceding year in the amount of the carryback refund that it expects to be entitled to at the end of the current year. The corporation can extend the time for payment of all or part of the tax still payable for the immediately preceding year by filing a statement on Form 1138.[75]
A corporation or any other taxpayer who has incurred a net operating loss, a net capital loss carryback, or a claim of right adjustment can file an application on Form 1139 (corporations) or 1045 (taxpayers other than corporations) for a tentative adjustment or refund of taxes for a year affected by the carryback.[76]
Corporate estimated tax payments can develop into substantial overpayments if the final results of the corporation's operations fall below expectations. In such cases a corporation can get a quick refund of overpayment of estimated tax within 45 days after filing an application on Form 4466. This procedure applies where the overpayment exceeds the revised estimate by at least 10% and the overpayment amounts to at least $500. Only corporations can apply for refunds of overpayments of estimated tax. The refund claim is made by filing Form 4466.[77]
Next Steps For You
Our firm does free reviews of prior-year returns. There’s absolutely no fee for reviewing original prior-year returns for possible amendment by our firm. For amended returns, we engage clients on a 50% contingent basis. Here’s how that works. First, we have to recreate the original return, which is easier said than done because this more often than not involves us trying to recreate the mistakes of others. Second, we then make the adjustments that we determine are necessary. Third, we have to print and snail-mail the amended return to the IRS since they do not allow amended returns to be electronically filed. Fourth, when the IRS confirms receipt, we have to contact the processing agent to make the case that the amended return should be approved. This is not an easy task. It can take up to 16 weeks for the processing agent to complete their review of the return. The IRS typically fights amended returns very aggressively. For that reason, amended returns are 1,500% more likely to be rejected than regular e-filed returns. Thankfully, there’s no downside. If the IRS rejects the amendment, they simply shred it and the original stays on file. Lastly, if, after nearly 4 months of going back-and-forth with the IRS, they decide to reject the amended return, then you owe us $0. You owe us nothing because we accomplished nothing.
Submit an online contact form to schedule a free consultation with one of our attorneys: click here.
[1] See Paxson v. C.I.R., 144 F.2d 772 (3d Cir. 1944), stating that statutes authorizing tax refunds and suits for their recovery are predicated on equitable principles.
[2] Wall Industries, Inc. v. U.S., 10 Cl. Ct. 82 (1986).
[3] I.R.C. § 6511(a).
[4] I.R.C. § 6511(b)(1).
[5] I.R.C. § 6511(b)(2)(A).
[6] I.R.C. § 6511(b)(2)(B). See C.I.R. v. Lundy, 516 U.S. 235, 240 (1996).
[7] Murdock v. U.S., 103 Fed. Cl. 389 (2012).
[8] See Mills v. U.S., 805 F. Supp. 448, 451 (E.D. Tex. 1992), (Section 6511 would “permit a taxpayer to file a tax return 40 years late and still have 3 additional years in which to file a claim for refund.”).
[9] See Baral v. U.S., 528 U.S. 431, 436 (2000) (where no taxes were ‘paid’ within the look-back period, the ceiling on the taxpayer's requested credit was zero).
[10] I.R.C. § 6409, added by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, Pub. L. No. 111-312, § 728. Although originally scheduled to expire after 2012, the provision was made permanent by the American Taxpayer Relief Act of 2012, Pub. L. No. 112-240, § 103(d).
[11] I.R.C. § 6402(a).
[12] Wells Fargo Bank & Union Trust Co. v. U.S., 115 F. Supp. 655, 54-1 U.S. Tax Cas. (CCH) P 9223, 44 A.F.T.R. (P-H) P 677 (N.D. Cal. 1953), judgment aff'd, 225 F.2d 298, 55-1 U.S. Tax Cas. (CCH) P 9527, 47 A.F.T.R. (P-H) P 1854 (9th Cir. 1955). IRS Instructions to Form 1310.
[13] I.R.C. § §73, 6012(b)(2).
[14] Treas. Reg. § 301.6402-2(e) (last sentence).
[15] Treas. Reg. § 1.1502-77(a). This regulation was amended effective for return years beginning after April 1, 2015. The general agency rule discussed in text remains unchanged
[16] IRS CCA 201125028.
[17] Bladine v. Chicago Joint Stock Land Bank, 63 F.2d 317, 12 A.F.T.R. (P-H) P 178 (C.C.A. 8th Cir. 1933); White v. Hopkins, 51 F.2d 159, 2 U.S. Tax Cas. (CCH) P 782, 10 A.F.T.R. (P-H) P 214 (C.C.A. 5th Cir. 1931). Clift & Goodrich v. U.S., 56 F.2d 751 (2d Cir. 1932); Cindy's Inc. v. U.S., 740 F.2d 851 (11th Cir. 1984).
[18] Dolan v. C. I. R., 44 T.C. 420 (T.C. 1965); Coerver v. C.I.R., 36 T.C. 252 (T.C. 1961), decision aff'd, 297 F.2d 837, (3d Cir. 1962).
[19] See Pennsylvania Turnpike Com'n v. McGinnes, 278 F.2d 330 (3d Cir. 1960).
[20] I.R.C. § 6402(c); Treas. Reg. § 301.6402-5.
[21] Maryland Casualty Co. v. U.S., 91 Ct. Cl. 203 (1940). In Royal Indem. Co. v. U.S., 117 Ct. Cl. 580 (1950), the surety was denied recovery but the denial was on the grounds that there was no overpayment.
[22] 31 U.S.C.A. § 3727; CCA 201111005. Although the prohibitions of the Anti-Assignment Act may be waived by the Government (see e.g., Schwartz v. U.S., 16 Cl. Ct. 182 (1989)), there were two reasons why the Government would not waive the Act in this case. First, the Service was careful to prevent the seller, which had not been dissolved, from having any cause of action against the Service. Second, there may have been other liabilities of the seller that could be satisfied by the overpayment at issue.
[23] Treas. Reg. § 301.6402-3(a)(1).
[24] Treas. Reg. § 301.6402-3(a)(5).
[25] Treas. Reg. § 301.6402-3(a)(1).
[26] Treas. Reg. § 301.6402-3(a)(5); Treas. Reg. § 301.6402-2(a).
[27] See Ritter v. U.S., 28 F.2d 265 (3d Cir. 1928).
[28] New England Elec. System v. U.S., 32 Fed. Cl. 636 (1995), dismissed, 56 F.3d 83 (Fed. Cir. 1995).
[29] Treas. Reg. § 301.6402-2(b); Sanders v. U.S., 740 F.2d 886 (11th Cir. 1984).
[30] Treas. Reg. § 301.6402-2(a).
[31] I.R.C. § 7422(a). Treas. Reg. § 301.6402-2(a)(1). Having made an administrative claim for refund is a jurisdictional prerequisite for filing a refund suit. See Garrett v. U.S., 132 F.3d 50 (Fed. Cir. 1997).
[32] See, e.g., Doll v. Glenn, 231 F.2d 186 (6th Cir. 1956); Carmack v. Scofield, 201 F.2d 360 (5th Cir. 1953); Alabama By-Products Corp. v. Patterson, 258 F.2d 892 (5th Cir. 1958); Ladd v. Riddell, 309 F.2d 51 (9th Cir. 1962). A claim for refund was contingent on disallowance of a later loss deduction. Since the contingency never occurred, the grounds for refund were insufficient and the claim was barred. Sun Chemical Corp. v. U.S., 698 F.2d 1203 (Fed. Cir. 1983).
[33] See Stelco Holding Co. v. U.S., 44 Fed. Cl. 703, 717-718 (1999); Nyhoff v. Durey, 1933 WL 4652 (N.D. N.Y. 1933).
[34] In Worden & Co. v. U.S., 86 Ct. Cl. 556 (1938), there was no evidence of a refund claim having been filed. See Staten Island Ship Building Co v. US, 33 F. Supp. 134 (E.D. N.Y. 1940).
[35] Treas. Reg. § 301.6402-2(a)(2).
[36] U.S. v. Andrews, 302 U.S. 517 (1938).
[37] Huettl v. U.S., 675 F.2d 239 (9th Cir. 1982). Charlson Realty Co. v. U.S., 181 Ct. Cl. 262 (1967); Allstate Ins. Co. v. U.S., 213 Ct. Cl. 96 (1977); Huettl v. U.S., 675 F.2d 239 (9th Cir. 1982). Charlson Realty Co. v. U.S., 181 Ct. Cl. 262 (1967); Allstate Ins. Co. v. U. S., 213 Ct. Cl. 96 (1977). Einson-Freeman Co. v. Corwin, 112 F.2d 683, 40-2 U.S. Tax Cas. (CCH) P 9534, 25 A.F.T.R. (P-H) P 266 (C.C.A. 2d Cir. 1940); Kelson v. U.S., 503 F.2d 1291, 74-2 U.S. Tax Cas. (CCH) P 9714, 19 Fed. R. Serv. 2d 1404, 34 A.F.T.R.2d 74-6007 (10th Cir. 1974), citing Mertens text; Union Commerce Bank v. U.S., 638 F.2d 962, 81-1 U.S. Tax Cas. (CCH) P 13390, 47 A.F.T.R.2d 81-1597 (6th Cir. 1981); Huettl v. U.S., 675 F.2d 239, 82-1 U.S. Tax Cas. (CCH) P 9349, 49 A.F.T.R.2d 82-1404 (9th Cir. 1982); L & H Co., Inc. v. U.S., 963 F.2d 949 (7th Cir. 1992). Huettl v. U.S., 675 F.2d 239 (9th Cir. 1982); Justice v. U.S., 616 F. Supp. 829 (S.D. W. Va. 1985). Arnold v. U.S., 289 F. Supp. 206 (E.D. N.Y. 1968).
[38] I.R.C. § 6532(a)(1).
[39] U.S. v. Garbutt Oil Co., 302 U.S. 528 (1938); U.S. v. Memphis Cotton Oil Co., 288 U.S. 62 (1933); Tucker v. Alexander, 275 U.S. 228 (1927).
[40] See Melchior v. U.S., 136 Ct. Cl. 483 (1956); Sicanoff Vegetable Oil Corp. v. U.S., 149 Ct. Cl. 278 (1960).
[41] I.R.C. § 6511(c).
[42] Omohundro v. U.S., 300 F.3d 1065 (9th Cir. 2002).
[43] I.R.C. § 6513(a); Chaney v. U.S., 45 Fed. Cl. 309 (1999).
[44] Treas. Reg. § 301.6511(c)-1. An agreement to extend the period of assessment of taxes ordinarily creates a related extension for refund claims, but when parties limit their agreement to a specific tax, such as an agreement to extend the limitation period for assessment of excise taxes, this will not automatically extend the limitations period for refund claims for income taxes. Indiana Nat. Corp. v. U.S., 980 F.2d 1098 (7th Cir. 1992).
[45] The portion of the tax paid within the look-back period includes payments allocated to interest and penalties associated with the tax. CCA 201429023. I.R.C. § 6511(b)(2)(A) provides that when the three-year period of I.R.C. § 6511(a) is satisfied, the amount of the refund that is allowable is the amount of tax paid within the three-year period (plus the period of any extension of time to file) preceding the filing of the claim; no refund is permitted for items deemed paid beyond that three-year lookback period. CCA 201220033. A claim for refund based on an amount claimed as a credit of an overpayment of 1999 tax but paid outside of the I.R.C. § 6511(b)(2)(A) look-back period was time barred and uncollectible. The taxpayer's claim for credit of his overpayment, and the subsequent claim for refund for the same amount, complied with I.R.C. § 6511(a) where the taxpayer filed his 1999 tax return in 2007 and filed his 2000 tax return in 2008. The 1999 return constituted a claim for credit, because it specified that the overpayment should be applied to his 2000 estimated tax. Similarly, the refund requested in his 2000 return constituted a claim for refund. However, although I.R.C. § 6511(a) was satisfied, the claim for credit did not satisfy the additional limitation in I.R.C. § 6511(b)(2)(A). Because the overpayment was deemed paid in 2000, his claim for credit in his 1999 tax return filed December 5, 2007 clearly fell outside of I.R.C. § 6511(b)(2)(A)'s look-back period, and thus, his claim for credit was time-barred. Even if I.R.C. § 6513(d) (regarding overpayment credited to estimated tax) applied, it would not change the fact that I.R.C. § 6511(b)(2)(A) was not satisfied. Further, the taxpayers argued that, because the Service allowed the overpayment as credit in 2009, it was deemed paid in 2009 pursuant to I.R.C. § 7422(d) and within § 6511(b)(2)(A)'s look-back period. However, the court disagreed, holding that I.R.C. § 7422(d) does not establish a “deemed paid” date for purposes of I.R.C. § 6511. Finally, the Service's mistaken allowance of the claimed credit did not validate the credit and allow the taxpayer to rely on I.R.C. § 7422(d) to assert that the claimed credit was timely; the taxpayer could not use a time-barred tax credit to validate a subsequent, and otherwise time-barred, claim for refund. Reynoso v. U.S., 692 F.3d 973, 2012-2 U.S. Tax Cas. (CCH) P 50539, 110 A.F.T.R.2d 2012-5748 (9th Cir. 2012). The statute of limitations limits the time in which a taxpayer may request a refund of wrongfully levied property, as well as the amount that may be refunded. A continuous wage levy was not released after satisfaction of the multiple-year liabilities listed on the levy and the Service applied later remittances to other tax years that were not listed on the levy and for which the taxpayer had not filed any returns. The taxpayer took no action for more than three years after the latest of the remittances. A refund of the later remittances was barred by the I.R.C. § 6511(b)(2) statute of limitations on refunds because no amounts had been remitted within the last three years. Had the taxpayer made an informal claim for refund, the question would have been whether the informal claim was made within two years of any of the latter remittances. CCA 201049034. The Court of Federal Claims has held that a motion to dismiss a tax-refund suit when the government contended recovery was precluded by I.R.C. § 6511(b)(2) was properly treated as a motion for dismissal for failure to state a claim, rather than as a motion for dismissal for lack of subject matter jurisdiction. The distinction is important because: (1) a dismissal on the merits, unlike a dismissal for lack of jurisdiction, typically carries res judicata effect, and (2) disputed facts are reviewed differently under the two regimes. Murdock v. U.S., 103 Fed. Cl. 389, 2012-1 U.S. Tax Cas. (CCH) P 50193, 109 A.F.T.R.2d 2012-892 (2012).
[46] I.R.C. §§ 1311 - 1314; I.R.C. § 1311(b). See also, Qureshi v. U.S. I.R.S., 75 F.3d 494 (9th Cir. 1996), as amended on denial of reconsideration, (Jan. 24, 1996). See Beaudry Motor Co. v. U.S., 98 F.3d 1167 (9th Cir. 1996).
[47] See I.R.C. § 6013(b)(3).
[48] I.R.C. §§ 6511(a), 6513(a).
[49] Burnet v. Willingham Loan & Trust Co., 282 U.S. 437 (1931). I.R.C. § 7503. Rev. Rul. 2003-41. Montiel v. United States, 118 Fed. Cl. 283 (2014).
[50] I.R.C. § 6511(d)(1).
[51] See I.R.C. § 6511(d)(2)(A).
[52] I.R.C. § 6511(d)(1).
[53] I.R.C. § 6511(d)(4)(A)-(C).
[54] I.R.C. § 6511(d)(5)-(6).
[55] I.R.C. § 6513(a).
[56] I.R.C. § 6403.
[57] Second Nat. Bank v. U.S., 42 F.2d 344 (Ct. Cl. 1930); Remington-Rand, Inc., v. U.S., 57 F.2d 1069 (D. Del. 1932), aff'd, 62 F.2d 1078 (3d Cir. 1933); Lovell Clay Products Co. v. U.S., 190 F. Supp. 317 (D. Wyo. 1961).
[58] Rev. Proc. 2005-18.
[59] I.R.C. § 6407. See also, U.S. v. Hecla Min. Co., 302 F.2d 204 (9th Cir. 1961).
[60] See I.R.C. § 6402(a).
[61] In re Ryan, 64 F.3d 1516 (11th Cir. 1995); Pettibone Corp. v. U.S., 34 F.3d 536 (7th Cir. 1994); Estate of Bender v. C.I.R., 827 F.2d 884 (3d Cir. 1987).
[62] I.R.C. § 6601(f). See Northern States Power Co. v. U.S., 73 F.3d 764 (8th Cir. 1996).
[63] I.R.C. § 6403. Blair v. U.S. ex rel. Birkenstock, 271 U.S. 348 (1926); Babcock & Wilcox Co. v. Pedrick, 212 F.2d 645 (2d Cir. 1954). I.R.C. § 6513(b)(2).
[64] I.R.C. § 6513(d).
[65] See Estate of Gruy v. C.I.R., 42 B.T.A. 1279 (1940); Roebling v. C.I.R., 28 B.T.A. 644 (1933), aff'd in part, rev'd in part, 78 F.2d 444 (3d Cir. 1935). Rev. Rul. 59-399.
[66] I.R.C. § 6514(a); Reg. § 301.6514(b)-1; U.S. v. Russell Mfg. Co., 349 F.2d 13 (2d Cir. 1965); U.S. v. Michaels, 840 F.2d 901 (11th Cir. 1988); U.S. v. C.E. Mathews, Inc., 263 F.2d 814 (5th Cir. 1959).
[67] I.R.C. § 6611(b)(2).
[68] I.R.C. § 6611(e).
[69] I.R.C. § 6611(b).
[70] I.R.C. § 6621(a)(1)(B).
[71] I.R.C. § 6621(a)(1). If one corporation has an overpayment and one corporation has an underpayment, and the two corporations join in a successful “F” merger, then the overpayment and underpayment are netted. CCA 200407015.
[72] Estate of Piper v. U.S., 9 Cl. Ct. 475 (1986).
[73] TAM 200303012.
[74] See I.R.C. § 6164(c). Treas. Reg. § 1.6164-2(a).
[75] I.R.C. § 6411(a), (d).
[76] I.R.C. § 6411(a); Reg. § 1.6411-1(b). There is no capital loss carryback for individual and fiduciary taxpayers.
[77] Treas. Reg. § 1.6425-1(b)(1).