Discussion:SSA w/h tax 15 years. Too late too file for refund?
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Discussion Forum Index --> Tax Questions --> SSA w/h tax 15 years. Too late too file for refund?
| 5 March 2007 | |
| Client's mom retired 15 years ago. She's been receiving her monthly checks via direct deposit. Recently, son noticed Fed taxes have been getting w/h all these years, but tax returns haven't been filed during retirement period. Mom received a letter from SSA acknowledging the mistake, "we should not have deducted any tax", which is now corrected. They sent a refund for current year withholdings and wrote "IRS should refund the rest of this money". I filed last seven years tax returns, to start, to claim refunds and of course, due to statute expiring, received a notice that they've disallowed our claim for refund for the older years.
Has anyone encountered this problem? Is there anything I can do? Do you think Sec. 1311 would apply? Any suggestions would be greatly appreciated. | |
| 5 March 2007 | |
| Normal rule is 3 years from due date of return or 2 years from payment of tax to claim a refund. Hurry and get 03 in now! | |
| 5 March 2007 | |
| Thanks. 03 has been filed. I was hoping for some obscure exception that would help for the older years, since this was an SSA error acknowledged by them. | |
| March 5, 2007 | |
| Since this was a SSA mistake, I would suggest that she try to get SSA to refund the prior years from 2002 and back. | |
| 5 March 2007 | |
| "Do you think Sec. 1311 would apply?"
Sorry, IRC Sec. 1311 does not apply. To invoke a claim under that section, your mother MUST meet three requirements: 1. There must have been a "determination" as defined at IRC Sec. 1313(a); 2. The error complained of must fall within one of the specifically enumerated "circumstance[s] of adjustment " of IRC Sec. 1312; 3. This determination must be "inconsistent" with a determination made in another prior year. IRC Sec. 1311(b). To quote one court case decision, "The mitigation provisions "cannot be invoked by a taxpayer who has slept on his rights and allowed the statute of limitations to run when he could have filed a refund claim within the statute of limitations." United States v. Rushlight, 291 F.2d at 519 "Is there anything I can do?" As Deback suggested, you might have better luck with the SSA since it was their mistake. | |
| March 5, 2007 | |
| Write the SSA specifically asking for the refund. Include a copy of their letter with your letter to them. Send the letter certified so tht you know it arrives, and allow 30-60 days for a response.
If you do not get what you are looking for, have your client call a senator or congress person form their district. They like this kind of stuff and might even put one of their aides to work on it. | |
Rgtaxservice (talk|edits) said: | 5 March 2007 |
| I don't think you'll have any luck with SSA. Considering they have forwarded the withholding to the IRS long ago, there is little they can do. They no longer have the money. And while it was SSA's mistake to withhold in the first place, the taxpayer must bear ultimate responsibility.
W2s, 1099s, SSA-1099 are not printed for the benefit of tax preparers. They are printed and given to the taxpayer to inform them of their various tax information. This oversight could have been easily rectified if only 3 minutes of time during the last 15 years was spent reviewing the tax document. I'm sorry if I sound harsh...but it seems that no one ever asks "Why?" anymore when they encounter things they don't understand. Instead it's replaced with "Why Me?" when bad things happen to them as a result of their doing or failure of doing. | |
| 5 March 2007 | |
| Tell her to think of it as an extra contribution toward the deficit. | |
Rgtaxservice (talk|edits) said: | 5 March 2007 |
| Make her feel even better. Tell her that the contributions she has made over the past 15 years has helped fund the Education Credit and hundreds of students have gotten an education because of her. Then applaud. | |
| 5 March 2007 | |
| RG - you're a realist aren't you? Yes, a little harsh, but I get it. I know the SSA no longer has the money, but I think I'll try what Beengel suggests anyway and I will tell her to send a letter to the SSA and a copy to her senator to see what happens. Otherwise, she can just take comfort knowing she helped a "little extra" in lowering the deficit. | |
| 5 March 2007 | |
| I don't think that a Sec. 1311 claim will work since that statute requires that there must be an assessment made by IRS that resulted in an inconsistent position. | |
