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Discussion Forum Index --> Tax Questions --> Protecting a Refund due Taxpayer
Isaacuncp (talk|edits) said:
| 30 March 2007
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| I have a new client who received a IRS CP2000 notice assessing additional income taxes on 1099 income for that was supposedly not reported on the original 2003 tax return. She did not take the notice to her tax preparer but instead paid it. When she came to me this year, I did some research and discovered that she had reported all the income. I wrote the IRS and requested that the taxes be refunded, but I am not sure if this is enough to protect the refund.I am worried since the statue is going to run out in April 17, 2007 before the IRS processes the info. The research I have done says the only way to protect income taxes is to file a 1040X as a protective claim, but I was afraid that this would confuse the issue even more because the original return is correct as is. The IRS proposed changes is wrong not the original return. I really need some help on this.
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Death&Taxes (talk|edits) said:
| 30 March 2007
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| It would seem to me the 1040X is the correct approach, but she will have two years from date of payment of the increased assessment to claim the refund [but would be barred from seeking additional refund for errors on the return itself]. E.g., IRS assesses $1200 in June 2005; she pays the bill in July 2005. She should have until July 2007 to obtain a refund of that money, but if you found another error in preparation on the 2003 return, the claim for refund on that would have to be filed by 4/15/07.
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Deback (talk|edits) said:
| March 30, 2007
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| Agree with D&T. I would file an amended return.
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TxSrv (talk|edits) said:
| 30 March 2007
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| Form 1040X by 4/17 to play safe. Left column of 1040X reflects #'s as last adjusted by IRS, not per return. Under facts posed, rightmost column 1040X will be return as filed. This is not a protective claim, but a garden-variety claim for refund. If you attached enough documentation/explanation that the 1099 was reported, there's a chance IRS will allow it w/o further contact.
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Kevinh5 (talk|edits) said:
| 30 March 2007
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| 4/17 is no due date for prior year returns, it is only a due date for this year's returns.
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Death&Taxes (talk|edits) said:
| 30 March 2007
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| Refund claims must be filed within three years of the original filing deadline, or within two years after the payment of tax, whichever is later. A refund claim filed more than three years past the deadline is limited to tax paid within the past two years.
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XZiler8r (talk|edits) said:
| 30 March 2007
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| yea for any refund for 03, the 1040x must be filed by the 15th of april, this year.
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