Typically, a taxpayer has a three-year statute of limitations to claim a refund.
The IRS has announced a wide range of coronavirus tax relief initiatives, in addition to those we previously wrote about, garnering much attention ranging from economic impact payments, to moving most tax deadlines from the traditional due date of April 15 to July 15, to tax relief provisions for business and individuals. However, the IRS quietly provided another benefit to taxpayers without much fanfare.
For 2016 tax returns, the normal April 15, 2020, deadline to claim a refund, either by filing an original return or an amended return, has also been extended to July 15, 2020. Typically, a taxpayer has a three-year statute of limitations to claim a refund. Once the statute of limitations has expired, the money becomes property of the U.S. Treasury and any subsequent refund requests will be denied.
If you have identified a federal refund opportunity for tax year 2016 but feared the statute of limitations had expired, you are not too late to claim the refund.
In order to claim a refund, you should file an original or amended 2016 tax return by the new July 15, 2020, due date.
If your 2016 tax return was filed by April 15, 2017, or properly extended and filed by October 15, 2017, and you believe you are now due a refund, the statute of limitations will expire three years from the date of filing the tax return or two years from the date the tax paid, whichever is later.
As has been the case throughout this unusual tax season, IRS continues to provide additional and necessary filing and payment relief, including extending the 2016 refund statute. For those taxpayers who may have discovered a refund opportunity, this is an additional window of time to claim a refund which will be forever lost after July 15 for 2016 tax returns filed on or before April 15, 2017, or properly extended. We wish you continued health and safety.
For Further Information
If you would like more information about this topic or your own unique situation, please contact Rodney N. Anello, any of the practitioners in the Tax Accounting Group or the practitioner with whom you are regularly in contact. For information about other pertinent tax topics, please visit our publications page.
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