Friday, September 11, 2015

Payment of "Tax" After the Assessment Limitations Period Expires - Refunds (9/11/15)

Apropos to our discussions in class of the statute of limitations on assessment, in ECC 201536020 (9/4/15), here, the IRS attorney addresses the refund of taxes paid after the assessment statute of limitations expired:
A tax payment made to the Service after the expiration of the period of limitation on assessment is considered an overpayment, even if there was no tax liability. Section 6401(a) & (c). The Service has authority to refund overpayments, but only within the applicable period of limitations. Section 6402(a); Rev. Rul. 74-580. The IRM in section (10-11-2012) Claim for an Amount Paid After the ASED, (stating "If an amended return is filed after the expiration of the period of limitations on assessment, any amount paid with that return must be refunded to the taxpayer. The taxpayer does not need to file a claim for refund in order to receive a refund of the payment made with the late filed amended return for additional tax assessment.") is discussing the need for filing a claim, not the applicability of the period of limitations. Therefore, a payment made after the ASED may be refunded to the taxpayer, but only within the limitations set forth in section 6511.
ASED in the quote means:  assessment statute expiration date and is the usual IRM term for the date the statute on assessment expires.  In the above quote, the payment was made with no timely assessment.

As indicated, the IRS can refund the overpayment resulting from payment after expiration of the statute of limitations, but the taxpayer must file the claim for refund within the refund claim statute of limitations if the IRS does not refund voluntarily.

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