Refund filing deadline (Notice CP80)

[starlord]

I got a Notice CP80 indicating I have a balance with the IRS on my 2017 taxes. For complicated reasons, I have not yet filed my 2017 return, but ultimately I will be owed a substantial refund. The CP80 notice says if I don't file, "I may lose this credit," but does not specify any deadline about when that might happen.

I understand the normal time limit for claiming my refund is three years from the original tax filing deadline (see https://www.irs.gov/individuals/dont-lose-your-refund-by-not-filing). For my 2017 taxes, that would be April 15, 2021. However, the IRS language says this applies "in most cases". The timing of this notice makes me nervous that perhaps I might forfeit my refund if I don't file today, by the 2019 filing deadline. After multiple attempts, I'm unable to get through to the IRS to clarify this.

Unfortunately, there are still several issues outstanding so I'm not able to file a (correct) 2017 return today. Is there any chance whatsoever that I might be forfeiting my 2017 refund by not filing today?

 

[Zigner]

It appears that your 2021 date would be correct in general. You should probably speak with a tax professional who can review the specifics of your matter and offer additional guidance.

 

[Taxing Matters]

Unfortunately, there are still several issues outstanding so I'm not able to file a (correct) 2017 return today. Is there any chance whatsoever that I might be forfeiting my 2017 refund by not filing today?

The tax law gives you until the later of 3 years from the date the return is due or two years from the date the tax was paid to file a claim for refund. For a 2017 return, you thus have until at least April 15, 2021 to file the return and claim the refund. The CP 80 is merely a letter reminding you that there are credits posted to the 2017 tax year and that no return has yet been filed and that you may lose any refund if you don't file in time.

What is the hangup in filing the return? Very, very few problems I've ever seen in my career would provide timely filing of a return (with an extension). At the very least you can usually file the return with the information you do have and when you information later that requires a change to the return you file an amended return. If you already know you have a refund due to you that suggests to me you have information enough to file the return. Still, you do have the time I indicated above to do it. As long as you do get a refund waiting until then won't cost you anything other than lost interest on the refund.

 

[starlord]

Hi @Taxing Matters - could you clarify "two years from the date the tax was paid"? My balance with the IRS is from estimated tax payments I paid more than two years ago. Would I now be out of range based on that criteria?

 

[Taxing Matters]

Hi @Taxing Matters - could you clarify "two years from the date the tax was paid"? My balance with the IRS is from estimated tax payments I paid more than two years ago. Would I now be out of range based on that criteria?

Two things. First, the statute states that a refund claim must be submitted within the LATER of either (1) three years from the date the return was due OR (2) two years from the time the tax was paid. So for an income tax return the earliest that the refund claim would expire is three years from the date the return was due. The two years from date of payment rule basically is there to cover two situations: (1) federal taxes for which there is no return filing requirement and (2) situations in which tax is paid sometime after the due date of the return. An example of the latter is where John filed his 2014 return on April 15, 2015. Two years later he is audited and the agent proposes additional tax of $5,000. He pays that $5,000 on September 20, 2017. He consults a tax professional in June, 2018 and determines that the agent was wrong and he should get his $5,000 back. It is now more than three years since the return was due and filed. But he's not out of luck here because he paid that $5,000 on 9/20/2017 and thus has until 9/20/2019 to file his refund claim to try to get that money back.

The second thing is that estimated tax payments are considered as paid for purposes of determining refund claims as having been paid on the due date of the return.