1040X deadline 3 years after filed

[Kea]

Client filed 1999 - 2005 taxes in June 2006 after receiving several notices from IRS for taxes due. That tax preparer filed him as single with his common law wife (no income) as dependent. Client lives in TX which recognizes commonlaw marriage.

I filed his 2006 taxes as MFJ ($7K refund). He and his wife have been working with someone at IRS to handle prior balance due. I have amended 1999 -2005 to file as MFJ. I have always understood that you could amend a return within 3 years after filed or after due date whichever is later. These amendments did not create a refund, only a reduction in tax due. The 1040X instructions also include the later of above or 2 years after tax was paid. Only the $7K from the 2006 refund has been paid toward the over $50K assessed.

The IRS agent they are working with has now told them that they can only amend within 3 years of due date of original return and references (according to client):

2007 US Master Tax Guide

Paragraph 154 Publication CCH 6013 code

Paragraph B

Paragraph 2

I admit I work off publications and Quickfinders. The searching I tried to do with the above information led nowhere. I'm sure I'm not entering something correctly. Could someone help me find the above cite or one that states that the taxpayer does have 3 years from date filed (besides IRS instructions or publications)?

Thanks.

[jainen]

>>Could someone help me find the above cite or one that states that the taxpayer does have 3 years from date filed (besides IRS instructions or publications)?<<

First of all, you must recognize that amended returns are an administrative convenience of the IRS. There is no statutory authority for them, although they are referenced in one or two places in the law. The IRS is perfectly free to accept, reject, or ignore an amended return as it wishes. There is no time limit as such for amending a return.

A CLAIM FOR REFUND, on the other hand, is limited to three years after filing (or the due date for late filed returns), or two years after payment. Since payment has not been made, I don't see why you shouldn't be allowed to adjust the amount.

I think it is unreasonable for the IRS agent to cite private industry sources, which carry extremely little authority, instead of her own regs and publications. Ask her to explain more fully her thinking, including what IRS procedures it is based on.

[Terry D EA]

The statement below comes right from the instructions for form 1040X. When did you amend the prior years? The last year to amend by 4/15/2007 was for tax year 2003 if that was the original date of the return. Remember, the clock doesn't start ticking until the date the original return was filed. The IRS is correct in their statement. They do not have to accept any claims for refunds or credits that fall outside the statute of limitations. You can amend a return any time you want but you cannot request a refund or credit after the 3 years.

By your statement below, you appear to understand this but by your post I am not sure what you are asking.

>>>>I have always understood that you could amend a return within 3 years after filed or after due date whichever is later. These amendments did not create a refund, only a reduction in tax due. The 1040X instructions also include the later of above or 2 years after tax was paid. Only the $7K from the 2006 refund has been paid toward the over $50K assessed<<<<<

File Form 1040X only after you have filed your original return. Generally, for a credit or refund, Form 1040X must be filed within 3 years after the date you filed the original return or within 2 years after the date you paid the tax, whichever is later. A return filed early is considered filed on the due date.

Terry D.

[Kea]

All 7 returns were originally filed in June 2005, and other than the 2006 refund held back, the taxes have not been paid. I amended them 4/24/07. If possible, I would like to give my clients a citation for them to pass on to the IRS agent. The amendments will reduce the amount of tax they owe. But, per jainen, there is no specific cite.

I guess I'll just have to leave them with the 1040X insturctions.

[BJM]

All 7 returns were originally filed in June 2005, and other than the 2006 refund held back, the taxes have not been paid. I amended them 4/24/07. If possible, I would like to give my clients a citation for them to pass on to the IRS agent. The amendments will reduce the amount of tax they owe. But, per jainen, there is no specific cite.

I guess I'll just have to leave them with the 1040X insturctions.

There is always a cite, it is the Internal Revenue Code. An Agent would never use a commercial source such as CCH in thier work papers and they would never use an IRS publication either. I did carry the Master Tax Guide with me on examinations but this was for reference only and I might furnish a taxpayer with a publication revelent to thier situation, but these were for information only to help the taxpayer understand the issue. An Agent's workpapers would only reference the code section, if the adjustment was unagreed the workpapers to write the unagreed issue up would include the IRC, the Regs and court cases. You can ask the Revenue Agent, or the Revenue Officer, if this is in collection, the IRC for your particular situation. These other sources have no authority. I believe there are sites on the web you can find the IRC for your cite and position.

[Julie]

Try this one:

http://www.fourmilab.ch/ustax/www/sections.html

There is always a cite, it is the Internal Revenue Code. An Agent would never use a commercial source such as CCH in thier work papers and they would never use an IRS publication either. I did carry the Master Tax Guide with me on examinations but this was for reference only and I might furnish a taxpayer with a publication revelent to thier situation, but these were for information only to help the taxpayer understand the issue. An Agent's workpapers would only reference the code section, if the adjustment was unagreed the workpapers to write the unagreed issue up would include the IRC, the Regs and court cases. You can ask the Revenue Agent, or the Revenue Officer, if this is in collection, the IRC for your particular situation. These other sources have no authority. I believe there are sites on the web you can find the IRC for your cite and position.