How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask JKCPA Your Own Question

JKCPA
JKCPA, CPA
Category: Tax
Satisfied Customers: 5748
Experience:  CPA with tax experience.
23848519
Type Your Tax Question Here...
JKCPA is online now
A new question is answered every 9 seconds

Hi! You worked with me before. I have a new question Hi!

Resolved Question:

Hi! You worked with me before. I have a new question: Hi! I filed a 2004 FIT return on 12/31/07. There was a balance due of $4978 that I requested be credited to my 2005 return. On 4/15/10 I filed an amended return showing a balance due of $1345. I received a letter from the IRS that the would not allow the claim because I filed the claim more than 3 years after I filed my tax return. Please verify that this is correct. If not, what should I state as my response to the IRS?
Submitted: 3 years ago.
Category: Tax
Expert:  Jacy replied 3 years ago.
Chat Conversation Started
Jacy :

Hello,

Customer :

Hello

Jacy :

Unfortunately, this is true. The IRS will not refund any money from a "closed" year. A year closes 3 years after the due date of the return.

Customer :

Actually, I worked with JK_CPA before, but this was opened to others.

Customer :

I thought it was 3 years after the filing of the return, which was 12/31/07.

Jacy :

Oh, sorry. Next time, if you want to specify an expert, put it at the beginning of the question.

Customer :

It was not closed at that time.

Jacy :

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

Customer :

The date of the original return was 12/31/07.

Customer :

The amended was filed 4/15/10.

Customer :

Sorry the date filed of the original return was 12/31/07.

Customer :

Can you forward this to JK_CPA?

Jacy :

Sure, I can opt out and send a message. I don't know if that expert is online right now, but they should get an email about it.

Customer :

He was noted as on-line.

Expert:  JKCPA replied 3 years ago.

Hello Customer,

 

Thanks for your request.

 

OK, I'm assuming you did not pay IRS a balance due with your returns but you had refunds on your original and amended returns.

 

Your original 2004 return credit of $4978 should have been applied to your 2005 return, as requested. Now here is where it gets a bit complicated and unfortunately, I'll have to say the IRS is probably correct.

 

When you filed your amended return on 04/15/2010, only 2004 taxes you actually paid between 04/15/2007 (or 10/15/2006 if you had an extension) and 04/15/2010 could have been refunded to you. If you paid your taxes timely - say through withholding or other credits, this would have been credited to you as of 04/15/2005 (original due date of the return), so any refund of these types of credits will be disallowed.

 

If a claim for refund is filed within three years from the time the return was filed, only the tax paid within the three years preceding the filing of the claim, plus the period of any extension of time for filing the return, can be refunded. (IRC 6511(b)(2)(A))

 

Best regards,

 



Edited by JK_CPA on 10/1/2010 at 2:23 AM EST
Customer: replied 3 years ago.
Thank you. I thought the letter said the refund would be allowable if it was claimed within 3 years of the original filing of the 2004 return, which was 12/31/07, so anything claimed by 12/31/10 would be refundable? Is this incorrect?
Customer: replied 3 years ago.
Your assumption is correct--no tax was due on the 2004. Actually, we applied the entire 2004 balance due to 2005. Only when we filed the amended did we request a small refund because the amount due to us was more than we had orginally claimed.
Expert:  JKCPA replied 3 years ago.

Well, the letter the IRS sends maybe somewhat misleading/incomplete. They do not always list all the rules affecting the claim and from experience, these letters are notorious for their vagueness. There is an additional over-riding rule - IRC 6511(b)(2)(A)) - that I quoted above. This makes another 3 - 3 1/2 year "window" which runs from 10/15/06 if extension granted or 04/15/07 through 04/15/10 (date you filed your 1040X). Only taxes actually paid during this window could be refunded. So if you paid, for example, all your original tax before 10/15/06 through withholding, other tax credits or payments, then any claim/amended return for refund of these amounts will be frozen.

 

You can always call the IRS at the number shown on the letter and ask them for more information or a better explanation. Sometimes, it may be better to write to them if you do not get a good response on the telephone.

 



Edited by JK_CPA on 10/1/2010 at 3:37 PM EST
JKCPA, CPA
Category: Tax
Satisfied Customers: 5748
Experience: CPA with tax experience.
JKCPA and 5 other Tax Specialists are ready to help you
Customer: replied 3 years ago.
You mean there is ambiguity in what the governement does?

Attachments are only available to registered users.

Register Here
Does frozen mean that they take it? Thank you--I'll write them.

After I sent this question, I learned of another issue. The 2005 return (originally extended to 10/31/06) was filed on 12/31/07. The refund due ($4978) was applied to the 2006 taxes. We filed an amendment to the 2005 return based on the amended return we filed for 2004. By looking at the account transcript for 2005, we learned that the IRS had not credited us for 2 of the estimated returns I filed with payments of 12K total. This had been claimed on the 2005 return (and applied to 2006) and the 2005 amended. When we called the IRS, they found the payments on the 2005 ledger for my husband which never made it the 2005 account transcript. We file jointly, but I guess the 2 ledgers are not linked, which seems odd. The agent moved the 2 estimated payments to the 2005 account transcript and I will be paid for that along with the rest of my refund. (When we filed the amended returns for 2004 and 2005, we chose not to apply the refunds to 2006 and 2007 to keep it cleaner.) So, there was still an amount of $4978 still due to us from 2005, which we couldn't find on the 2005 account transcript. We found that the 2004 account transcipt indicated that this $4978 would be moved to 2005 account transcript, but the IRS never took that step. It was put on my husband's ledger for that year, and again because his account and mine are not linked, it never made it to the 2005 account transcript. This time when we spoke with the IRS, the agent said that they can't pay us that amount, and we have to file Form 843. I must admit that I don't have much faith in that approach, given the errors and mixed messages we have gotten from the IRS (I am still chasing a payment for $8000 I made, which they keyed in as $800; bank caught mistake, withdrew the remaining $7200 to pay the IRS. Four years later I learn that the IRS was notified by the bank, but they never went back for it, and I have had $7200 sitting in Chase Manhattan for 4 years. No one ever notified me. The only way I discovered it is by missing it on the account transcript and researching what happened.) I think it is odd that one agent moved those estimateds with no issues and authorized that a check be generated and that another refused to provide a refund for a mistake that was clearly made by the IRS. Sorry to go on so long, but it gets pretty detailed. BotXXXXX XXXXXne, what approach would you take with the IRS? Call the IRS back, not ask for a $4598 refund, but ask for the $4598 to be applied to the 2005 account transcript as the 2004 transcript indicated, and then when they generate a check for payment it will hopefully include the additional $4598?
Guess this turned out to be pretty complicated so I may owe you more money.

BTW I got so behind on these returns is because I hired an accountant to review the 3, 4, and 5 returns I had completed. He charged me an arm and a leg up front, took 6 months to finish, and they were full of clear errors. He never completed the State returns. After we moved to NC, I met with H&R block in early 2008 to review the returns I had filed and correct them if necessary. The associate left his position with them unfinished on 4/15. Then they misplaced the raw data and returns for almost a year. I would love a flat tax!
Customer: replied 3 years ago.
Please advise how to s/u payment for this question.
Expert:  JKCPA replied 3 years ago.

Hello,

 

Sorry for the delay, I was out of town for the weekend.

 

Frozen means they keep the credit and do not refund it.

 

Thank you for your accept on the original question. No further payment is necessary for this thread; however, I will have to ask you to post your other issues about the payments in a separate post.

 

Best regards,

 

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.