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Arthur Rubin
Arthur Rubin, Tax Preparer
Category: Tax
Satisfied Customers: 1493
Experience:  22 years of tax preparation experience, including individual, trust, and estate returns.
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My understanding that the filing date 2015TY returns

Customer Question

My understanding that the filing date for filing 2015TY returns has been pushed to the 18th because the 15th falls on a holiday (Emancipation Day) recognized by Washington DC
I also understand that this extra 2 days to file extends ONLYfor the filing of 2015TY federal and state returns.
I have been told that if you are filing for 2012TY that your rights under the SOL for 2012TY with a Ffled Extension) expires NOT on the 18th but still remains on the 15th because, again, the extension applies ONLY for the 2015TY filing.
True or Not?
Bill C.
Submitted: 6 months ago.
Category: Tax
Expert:  Arthur Rubin replied 6 months ago.
That is approximately correct. The three year (four years for California returns) limit does not take holidays into account; the return must be received by the agency within 3 years. If the agency is closed on the date three years from the due date of the original return, you must ensure the return is received on day when the agency is open, before the statute of limitations runs.
Customer: replied 6 months ago.
By "receipt" you mean a registered mailing with a stamped certified mailing postmark from the USPS? Correct?
Expert:  Arthur Rubin replied 6 months ago.
I'm afraid the statute of limitation is not modified by the "mailbox rule"; a certified or registered postmark counts for initial due dates (4/18/16 for 2015 returns), not for amended returns subject to the statute of limitations. An amended 2012 return must be in an IRS office by the close of business on a day they are open on or before 4/15/16. I think that means by 4/14/16. Express Mail should work, even if you send it tomorrow.
Customer: replied 6 months ago.
Even if the 2012TY filing is the INITIAL filing and not an amended return?
Expert:  Arthur Rubin replied 6 months ago.
I hadn't considered that, but....there being no statute of limitations on an unfiled return, the return should be accepted, even if late, but if the return is not received by 4/15/16, (1) you will almost certainly not be able to get a refund (if you had withholding or estimated taxes for 2012), and (2) you may be unable to make certain elections on the tax return. Some elections close on the extended due date of the return, some in the next calendar year (i.e., the end of 2013), and it's possible that there are some elections which cannot be taken if the return is after the statute of limitations date. I can't think of any, offhand.
Customer: replied 6 months ago.
I'm wondering then if my 2012TY filing is an initial filing will the "postmark" rule be sufficient to save my rights (elections and refunds) under the SOLs?
Expert:  Arthur Rubin replied 6 months ago.
I'm afraid not, at least for refunds. There is a specific section of law that refunds cannot be made of payments more than 3 years before the return was received, without mention of the mailbox rule. There are regulations which clarify that the mailbox rule applies to timely filed returns for the purpose of that law. There is no provision, in law or in regulation, that the mailbox rule applies to untimely filed returns. Your elections are likely OK, but the IRS is forbidden by law (with some exceptions, such as the Foreign Tax Credit) from making a refund of payments more than three years ago, even if the IRS agrees that it should be paid.
Customer: replied 6 months ago.
For clarity, here is my position. Due to some personal issues (a potential divorce), I elected to hold my filings until a resolution of my personal life was reached (at least to the best of my judgment). So with that being said, I have not filed 2012, 2013, 2014 and 2015 and have filed JUST under the 3rd year limit (with the 1 year extension always filed for each year). I have credits with the IRS that either have come from rolling over to the following years or from liens taken fro my bank. I keep getting letters stating that I have credits on file with the IRS and notifying me that they are keeping them until the follow-on years are filed. So I don't know if these accrued credits will be refunded to me as they keep applying them to the following years.
Expert:  Arthur Rubin replied 6 months ago.
Sorry about the delay. Considering your last statement, I did some more research. It looks as if the IRS has accepted the credits/refunds, but is applying them against unfiled returns. Your strategy allows them to do that indefinitely. As your strategy is not based on tax considerations, I cannot comment as to whether it is a good strategy. However, even if your refunds could be legally paid, your strategy gives the IRS a reason to defer payments, so you're not getting a refund until your filings become current. At that time, they may reconsider whether they are allowed to refund you money, and you would likely not be able to appeal, many of the returns being closed by then. I don't see your tax strategy as being successful....
Customer: replied 6 months ago.
Yes..I know. But being the head Floorsweeper, Engineer, Shipment Clerk, Bookkeeper, Logistics Planner, Manufacturer, etc.
All I really aimed at was 1) protecting a position as a new Divorces Father of one and 2) preventing failure to File Penalties, Late filing Penalties, Interest, etc.
My situation is unique.... to say the least. I am a Sole Proprietor that has accumulated over 3,200 pieces of unique equipment for 28 years in business that in at least one representative case a single piece of equipment has risen in value from the $2,000.00 at the 1983 purchase price ( which has reached a full depreciation tem of 7 years) to a "surplus" value of over $25,000.00 in 2015. Times this by the hundreds and you can see where I stand financially...Especially in a potential Divorce case as well as a tax strategy!
An example....I have 5 identical pieces of Equipment that I purchased in 1988 for $1,800.00. All 5 have been fully depreciated during their "service years" and they are well used but have appreciate tremendously. At this moment...if necessary...I can make 1 phone call and have a check sent to me for $115,000.00. Take this not as bragging but illustrating for you where I sit.
The equipment purchases are, in essence, my 401K program!
I have deferred as much as I can over the past years and since I am nearing 60 years of age, I am now looking at dissolvent or at least reduction of the business whilst at the same time maintaining a tax/retirement strategy.Advise with this info if you care to.Thanks, ***** *****
Expert:  Arthur Rubin replied 6 months ago.
I cannot speak as to divorce strategy. You'll need a different expert for that. You are subject to the failure-to-file penalty for each year in which you file after the due date (or, sometimes, the extended due date); but that penalty, for Federal purposes, is based on the tax due, so if you would get a refund, there is no penalty. California has a more complicated failure-to-file penalty, but, if there is no tax due, there is still no penalty.

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