IRS Refunds and the Statute of Limitations

I got a notice from the IRS, they owe me money!”

That’s not a notice that you expect to receive from the IRS, but it happened recently to a new client.  The IRS reached out to them in order to let them know of a credit balance on their account.  Of course, there was a catch. The credit was applicable to tax year 2010, a year for which the IRS said they had not received a tax return.  Until the return is filed they will just hold the taxpayer’s money.

The solution is to file the return.  Taxpayers have three years from the due date of the return to file for a refund. Tax year 2010 returns were due on April 18, 2011.  So, after April 18, 2014 that credit is gone forever.

Sometimes, taxpayers don’t file returns because they are not required to.  This is often the case for taxpayers who do have enough taxable income, maybe someone whose primary source of income is social security.  Just because you are not required to file doesn’t mean that you should not file.  Every year, hundreds of millions of dollars in tax refunds go unclaimed.  In many instances, the reason they go unclaimed is that the taxpayer did not file the return because they were not required to.

If the IRS owes you money, file the tax return!

For more information, contact our office.

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