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Federal Tax Refund Problem

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Joe in NC

Junior Member
What is the name of your state (only U.S. law)? North Carolina

I had to close a business in the 1990s and ended up with a large tax debt. Liens were placed and the last one expired in 2005. I received a document from the IRS releasing the lien. The debt was huge and was not satisfied. All my taxes have been filed on time and paid in full since 1996. I retired in 2015 and stated paying estimated taxes. 2015 was the first year I was due a refund since my troubles in the 90s. I asked that the refund be credited to my 2016 taxes. In May I received a letter from the IRS stating there would be a delay in crediting the refund because I may owe back taxes.

Does the IRS have a claim on the refund?
 


Joe in NC

Junior Member
Thanks I will. The refund is not that great and if gone can be made up by years end. It is important I know my status so if necessary I can be a couple of % short come April 15th.

I though 10 years was the limit but it has been 20 years since I have had dealings with tax lawyers and CPAs.
 

LdiJ

Senior Member
Thanks I will. The refund is not that great and if gone can be made up by years end. It is important I know my status so if necessary I can be a couple of % short come April 15th.

I though 10 years was the limit but it has been 20 years since I have had dealings with tax lawyers and CPAs.
The IRS is not supposed to be able to collect once the statute of limitations has passed. That is why they released the lien.
 

Joe in NC

Junior Member
The May letter said they would get back to me in 6 to 8 weeks. I haven't heard anything from them, and waited until August then sent letter via USPS requesting they credit the refund to my 2016 taxes and that they remove the flag from my account. I don't want to do this every year. Thanks for the help, I agree with LdiJ but who knows. I'll keep watching this thread and see what others have to say.
 
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AdjunctFL

Member
Joe, the collection statute is ten years after the tax is assessed. All assessed tax may not have been included in the liens. For example, if there was a final payroll tax assessment within the last 10 years it would be appropriate to offset that tax against any refund due you now. Note that it is the assessment date, not the due date of the return that controls.
 

Joe in NC

Junior Member
In time period 1994/1995 I was represented by an excellent accountant/former IRS employee with many years experience, all issues were made known to the IRS. There were actually several liens with last one expiring in 2005. The IRS has had no communication with me if their had been additional assessments post 1995 I'd know it.

I think they are just slow, my understanding is they are under staffed. Thank again for the input.
 

LdiJ

Senior Member
In time period 1994/1995 I was represented by an excellent accountant/former IRS employee with many years experience, all issues were made known to the IRS. There were actually several liens with last one expiring in 2005. The IRS has had no communication with me if their had been additional assessments post 1995 I'd know it.

I think they are just slow, my understanding is they are under staffed. Thank again for the input.
You could try the taxpayer's advocate if its a hardship for you not to receive your refund in a timely manner.
 

Joe in NC

Junior Member
I spent 1.5 hours on the phone with IRS today. The first person I talked with could find no outstanding issues he looked under both my name and my wife's name. He then transferred me to the department that handle business taxes, another search of records could find no issues. I was able to update my address and delink my name from the business that was closed in 95.

So tomorrow it's back on the phone to try and get the refund credited to my account, no one I talked to today could provide an answer as to why it wasn't credited in the first place.

Thanks again to all who helped.
 

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