Failure to Timely Make a Claim for Refund Will Bar that Refund

Posted on March 01, 2018

In order to timely make a claim for refund from the IRS, one must make the claim for refund within three years from the due date of the tax return or two years from the date that the tax was paid, whichever was later. If you do not timely file a claim for refund, the law will bar the IRS from paying the refund to you, even if everyone agrees that you were otherwise entitled to the refund. Further, if your timely claim for refund does not sufficiently detail the basis of your claim, the law may also act to bar your refund. In a recent case in the United States Court of Federal Claims, Walter Shields and Maureen Allenbach sued the United States claiming refunds for several years, including 2010. The Court held that the taxpayers had timely filed their claim for refund for that year because it was made within three years from the date their tax return was filed. However, the claim for refund made by the taxpayers was only in the amount of $1.00 and did not otherwise specify the basis upon which they were claiming the refund. Because their claim for refund failed to describe any basis for the claimed refund, and because the claim for refund did not meet any of the exceptions, the Court held that the claim for refund for 2010 should be denied. The Court also looked at another claim for refund for 2010 and held that because the claim for refund was filed more than three years after their tax return was filed, the claim is untimely. Further, because no tax was paid in the two years preceding the claim for refund, the taxpayers are not eligible to claim a refund under that basis. The Court also rejected the taxpayers’ other claims for refund based upon the inconsistent arguments that they made. If you are going to make a claim for refund, you must do so within three years from the due date of the tax return or two years from the date the tax was paid or your refund may be barred by law. Do you think you are entitled to a refund? Call us, we can help.