Discussion:State statute for amt due b/c of IRS adjustment

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Discussion Forum Index --> Basic Tax Questions --> State statute for amt due b/c of IRS adjustment


Discussion Forum Index --> Tax Questions --> State statute for amt due b/c of IRS adjustment

Cestrobeck (talk|edits) said:

2 September 2011
We filed taxpayer's 2007 return on time, on 4/11/08. IRS came back in 2010 with an adjustment/decrease in Sch A that the TP agreed with, and he paid the balance due with his refund from 2010 filing. Now the state has gotten info of the adjustment/decrease in Sch A, and sent an assessment for the tax due. The statute of limitations expired 4/11/11 as far as I can tell. Doesn't the SOL apply to amounts due as well as refunds? I'm inclined to send a letter citing the statute and refusing to pay. I've researched on this board and noted that a lien can extend the SOL. The IRS did file a lien, but the state didn't. Is this something we can win because of the SOL?

TOrahaCPA (talk|edits) said:

2 September 2011
If it was a federal return filed on 4/11/08 it is deemed filed on 4/15/08 for purposes of SOL. So for Federal the SOL expires on 4/15/11. Just an fyi.

In Michigan, the SOL is the federal SOL plus one year. So we have a 4 year SOL. You need to find out about GA. I don't know.

Death&Taxes (talk|edits) said:

2 September 2011
And some states have provisions that they must be notified within X days after a Federal change to income.

DaveFogel (talk|edits) said:

2 September 2011
See below, which I copied from the Georgia Department of Revenue’s website. Note the portion that I highlighted in bold text:

Q. What is the statute of limitations for assessing tax liabilities?

A. The limitations are as follows:

1. The Department of Revenue normally has three years in which to assess additional tax. However, if a claim for refund is filed within the six-month period, before the close of the statute of limitations period, the period of assessment is extended for six months beginning on the day the claim for refund is filed.

2. If the taxpayer has omitted more than 25% of the gross income from the return, the limitation is six years.

3. In the case of fraud or if the taxpayer fails to file a return, there is no time limit.


Q. What are the requirements when the Internal Revenue Service changes my return?

A. The requirements are as follows:

1. When a change is made, the taxpayer must notify the Department of Revenue within 180 days.

2. If the taxpayer fails to notify us, we have five years after we receive the report from the Internal Revenue Service to make an assessment.

3. Interest on the tax is due from the due date of the return through the date the taxes are paid.

4. If it is determined there has been an overpayment of tax for the year, failure to notify the Commissioner within 180 days will result in the forfeiture of your right to any refund as a result of the change or correction. However, for tax years beginning on or after January 1, 1987 90% may be applied to another year’s liability on the same Internal Revenue Service report.

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