I have been writing about the statute of limitations as they relate to non-filers. But there are other special circumstances in that Congress and the Courts have developed rules that affect the statute of limitations regarding refunds. Here are a few pointers to think about:
- Not all payments are classified as tax payments. Sometimes people will pay the IRS a deposit to stop interest charges from accruing. Refunds of deposit money do not come under the statute of limitations.
- An agreement between the taxpayer and the IRS to extend the statute of limitations for audit purposes also extends it for refunds.
- Claims involving bad debts or worthless securities have a seven-year period in which to file a claim.
- Net Operating Losses, Capital Losses, and general business tax credit carrybacks use the due date from the year that the loss or credit occurs to determine the statute of limitations.
- Foreign tax credits have a 10-year statute of limitations.
Missing the date for claiming a refund is a real bummer. If you are lucky, maybe one of these exceptions will save the day.