Individual client files 2007 return in December 2009 (late) requesting refund. Refund received. Client then amends return in February 2011 for additional refund. Refund received. Return now in audit.
I know the rule for timely filed returns requesting refunds is (basically) three years from date of filing or two years from date of payment, whichever is earlier. As I recall, the rule on amended returns is that they don't extend the statute unless filed within the last few months of the original statute, in which case there is a minor extension to give the Service time to examine the amendment.
Here we are not requesting a further (third) refund. The Service will likely be seeking taxes, penalties and interest if we understand their position (no report received yet). If we are under the 25% of gross calculation which would extend the statute to six years, when does their time run out? Is it three years from original due date (4/15/08)? From the original extended due date (10/15/08)? From the actual date of filing (12/15/09)? Two years from something? Does the amendment play any role?
-- Bruce Cantor, CPA, JD Admitted in Colorado