Low-Income Taxpayer Clinic
Claims for Refund
A claim for refund of an overpayment of any tax imposed must be filed within 3 years from the time the return was filed or 2 years from the time the tax was paid, whichever is later. IRC §6511. No refund will be granted to a claim made after the expiration of the statute of limitation. An overpayment is any payment in excess of the tax due.
When Tax is Considered Paid:
- A tax is considered paid when the IRS levies on funds of the taxpayer.
- Seized property is not considered payment until it is sold.
- Withheld income tax and estimated tax payments are considered to be paid on the date the tax return is due.
- Taxes paid through garnishments on wages and assets are considered paid on the various dates the garnishments were applied to the taxes.
- Payments made through the application of the refund for another year is considered paid when the offset was made.
Filing a Claim for Refund
Refund claims for overpaid income taxes for previous years are made by filing IRS Form 1040X for individuals or IRS Form 1120X for corporations. Refund claims for taxes other than income taxes are made on IRS Form 843. The claim must include a statement of the facts and issues as to why the taxpayer is entitled to a refund.
Refund claims for prior years will usually be examined by the Examination Division of the IRS. If the IRS denies the claim for refund by sending a statutory notice of claim disallowance or if six months pass without any action, the taxpayer may file a refund suit in either the Federal Claims Court or a U.S. District Court.
A return is deemed filed on the due date if it was filed early. IRC §6513(a). If no return was filed, the refund claim must be made within two years of when some portion of the tax was paid (see above for what is considered a payment).
Section 6321 of the IRC allows the IRS to file a lien in favor of the United States upon all property, and rights to property, belonging to the taxpayer if, after notice and demand, the taxpayer neglects or refuses to pay the tax for which the taxpayer is liable. This is officially called a Notice of Federal Tax Lien. In many cases the IRS will record the lien in the public records office in the county where the taxpayer lives or in the county where the taxpayer owns property. If the state does not have a county recording system, the IRS sends the notice to the Secretary of the State. Even if the taxpayer does not own property when the lien is filed, the lien will attach to any property that the taxpayer may own in the future, if the lien has been recorded.Protective Claims
Taxpayers may file protective refund claims before the expiration of the statute of limitations to preserve their right to make a claim for refund. Protective claims have the same legal effect as any other refund claim. If there is any doubt as to whether a refund claims is appropriate, a protective claim should be filed.
Resources
Amended Returns
Innocent Spouse
Internal Revenue Code
| IRC §6402 | Authority to make credits or refunds |
| IRC §6511 | Limitations on Credit or Refund |
| IRC §6513 | Time Return Deemed Filed and Tax Considered Paid |
IRS Forms and Publications
| IRS Form 843 | Claim for Refund and Request for Abatement |
| Instructions for Form 843 | |
| IRS Form 1040X | Amended U.S. Individual Income Tax Return |
| Instructions for Form 1040X | |
| IRS Publication 17 | Your Federal Income Tax |
