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Section 1341 claim of right doctrine

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I have a client that had to pay back a pension payment from 2004. They were never issued a corrected 1099. I amended the 2004 return with statement reflecting the situation. IRS responds that since we do not have a corrected Form 1099 we will need to claim this repayment as a Section 1341 request and deduct the payment or tax credit in the year of repayment, not in the year it was received.

Ok - found a few articles on the internt. No problem.

But, how? Gee, I don't see a line item for this one. Does this have to go on a particular form? I don't really find anything. Form 843 doesn't work. Or do I just shove it on a payment line? Do I file a 1045? It seems like I should file a 1040x.

Any advise out there today....or tomorrow...

Thanks

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Posted · Report post

>>It seems like I should file a 1040x<<

No, it goes on the current year as either a deduction or a credit. See "repayments" on page 33 of Pub 525 http://www.irs.gov/pub/irs-pdf/p525.pdf

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Posted · Report post

Well, if it is taken on the A, it goes on Line 28, line 7 of that worksheet. That is for Claim of Right deductions under $3000. If it is over $3000, then Pub 525 page 33, shows you how to calculate it and report it.

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