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RD
RD, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 8784
Experience:  CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..
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Filing form 2555 on a late return... Please provide documented

Resolved Question:

Filing form 2555 on a late return...

Please provide documented support for your answer.

Questions -

(1) Is it possible to amend a tax filing under audit?

(2) (If so, then) Is it possible to claim the form 2555 exclusion NOW on the amended 1040X for 2005 and also for 06 07 + 08 where the non-USA spouse has not yet filed. The auditor claims that it is not possible to claim the f2555 exclusion as the filing deadlines have passed for all these years.
Submitted: 4 years ago.
Category: Tax
Expert:  RD replied 4 years ago.

Your initial choice of the exclusion on Form 2555 or Form 2555-EZ generally must be made with one of the following returns.

  • A return filed by the due date (including any extensions).

  • A return amending a timely-filed return. Amended returns generally must be filed by the later of 3 years after the filing date of the original return or 2 years after the tax is paid.

  • A return filed within 1 year from the original due date of the return (determined without regard to any extensions).

 

You can choose the exclusion on a return filed after the periods described above if you owe no federal income tax after taking into account the exclusion.

 

Hence, you can amend 2006, 2007 and 2008 now since the 3 years for 2006 expires on April 15th, 2010.

Customer: replied 4 years ago.
Please provide documented support for your answer. Tax code is the best source.

thanks
Expert:  RD replied 4 years ago.

This is from the IRS publication 54.

 

Here is the link to the publication-

http://www.irs.gov/publications/p54/ch04.html#en_US_publink100047512

 

 

Let me know if you have any question.

 

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.

Customer: replied 4 years ago.
Hello RD,

I am sorry, but it seems as if you totally disregarded question (1) above.

It looks like you did answer question (2) from the direct quote from publication 54, thank you.
Expert:  RD replied 4 years ago.

Yes, you can amend a tax return pursuant to audit. However you cannot claim Form 2555 exclusion for the tax year 2005.

 

Customer: replied 4 years ago.
Sorry to do this to you, but could you please give me a source for this statement "you can amend a tax return pursuant to audit"? The auditor only responds to documented evidence. It is very important.


thanks
Expert:  RD replied 4 years ago.

Sorry for the late response. Its just busy this time of the year.

 

The answer to your question can be found in the instruction to Form 1040X.

Here is the link- read under purpose of the form-

http://www.irs.gov/pub/irs-pdf/i1040x.pdf

 

It does not clearly state that you can file after or in audit. But it does say that it can be used to amend figures previously adjusted by IRS.

 

Also, in practical scenario- I have seen taxpayers amending the tax return. Also, you would not find any publication or regs that state that you cannot file amended tax return in audit. It only specifies that time period within which a tax return can be amended.

 

I will also refer you to a lawfirms website which talks about audit and your rights-

http://www.lawfirms.com/resources/tax/irs-and-tax-audits/the-audit-process.htm

 

 

Let me know if you have any question.

 

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.

 

RD, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 8784
Experience: CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..
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