Individual Statute of Limitations

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

Reply to
bc
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The clock (3 year or 6 year if the 25% of GI is in effect) started to run when the late filed return was received by the IRS.... 12/15/09. Amending it in 2/11 does not extend the clock.

Reply to
Alan

Only if it's a balance-due amended return, and the extension is 60 days from the date of receipt (not the date of mailing).

December 2012, because the original return was late-filed.

Reply to
D. Stussy

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