The period of limitations for claiming a credit or refund may be extended by agreement only by the execution of a consent to extend the period of limitations on assessment (e.g., the Service and the taxpayer sign a Form 872, Consent to Extend the Time to Assess Tax) on or before the ASED.

The period for claiming a credit or refund is extended until 6 months after the expiration of the consent. The limitation on the amount that may be claimed (the lookback rule) is applied by allowing the recovery of any amount paid after the execution of the consent (and before the filing of the claim or the making of the credit or refund), as well as the amount that could be claimed, looking back two years or three years as stated in IRM 25.6.6.6.3.1 and IRM 25.6.6.6.3.2, above, from the date of the execution of the consent. See IRC § 6511(c).

The Service may execute the consent even though it has completed its examination and has no plans to make an assessment. The requirements for executing the consent are in IRM 25.6.22, Statute of Limitations - Extension of Assessment Statute of Limitations by Consent. The agreed upon period can be extended further by a consent signed on or before the ASED. The consent does not, however, shorten any special period of limitations on refund.

Restricted consents. If the consent is restricted to certain items, the claim is similarly restricted for credit or refund. IRM 25.6.22.8.12, Basic Restrictive Statement (08-01-2003) at (2) provides that the basic restrictive statement should include the following: "The provisions of Section 6511(c) of the Internal Revenue Code are limited to any refund or credit resulting from an adjustment for which the period for assessment is extended under this agreement."

A claim for credit or refund based on the carryback of an NOL under IRC § 172 or a Capital Loss under IRC § 1212 may be filed within the three year period from the due date of the return ( for the taxable year of the NOL or Capital Loss which results in such carryback) plus the period granted for any extension of time to file for the year in which the NOL or Capital Loss is incurred. See IRC § 6511(d)(2).

Limitation. The overpayment must be attributable to the carryback.

The special period provided in IRC 6511(d) is an additional period, rather than a substitute period, for the general period provided in IRC 6511(a) for the carryback year. See Rev. Rul. 65-281, 1965-2 C.B. 444.

"Quick Refunds" of a Carryback. An application for a tentative carryback adjustment under IRC 6411 made on Form 1045, Application for Tentative Refund, or Form 1139, Corporation Application for Tentative Refund, is not a claim for credit or refund for purposes of filing a claim within the period of limitations.

A claim for credit or refund based on the carryback of the Business Credit (IRC § 39) may be filed within the three year period from the due date of the return plus the period granted for any extension of time to file for the year of the unused Business Credit, which results in the carryback. See IRC § 6511(d)(4).

Limitation. The overpayment must be attributable to the carryback.

Effect of Certain Carrybacks from a Subsequent Year. Any portion of the business credit carryback attributable to a net operating loss carryback, capital loss carryback, or other credit carryback from a subsequent taxable year may be filed within the three year period from the due date of the return plus the period granted for any extension of time to file for that subsequent year.

A claim for refund or credit based on a bad debt deduction under IRC § 166 or § 832(c) or a worthless security loss under IRC § 165(g) may be filed within seven years from the due date of the return for the year with respect to which the claim is made (determined without regard to any extension of time to file). See IRC § 6511(d)(1).

If the deductibility of the bad debt or worthless security loss affects a Net Operating Loss (NOL) carryback, the period is the later of:

Limitation. The overpayment must be attributable to the deductibility of the bad debt or worthless security loss.

A claim for credit or refund based on tax paid or accrued to any foreign country or a possession of the United States for which a credit is allowed either under IRC § 901 or by a treaty may be filed within ten years of the due date of the return (determined without regard to any extension of time to file) for the year in which the foreign taxes were actually paid or accrued and not the carryover year to which the taxes are carried and claimed as a credit. See IRC § 6511(d)(3).

Limitation. The overpayment must be attributable to the allowance of the foreign tax credit.

Change of Election. A taxpayer may deduct the foreign taxes under IRC § 164 or elect to credit the taxes against U.S. tax liability under IRC § 901. The election can be made or changed at any time on or before the RSED under section 6511(d)(3) for the year the foreign taxes are paid or accrued (including extensions of the RSED due to the execution of a consent to extend the ASED for that year).

On July 22, 1998, IRC Section 6511(h) was added to the IRC, which provides that the general period of limitations on claims for credit or refund (IRM 25.6.6.6, above) is suspended during the period that an individual is "financially disabled" .

Financially Disabled. Financially disabled means being unable to manage financial affairs.

No Suspension While Financial Affairs Managed by Certain Persons. The period of financial disability does not include any period in which the taxpayer's spouse or any other person is authorized to act on behalf of the taxpayer in financial matters (e.g., a guardian).

Procedural Requirements Regarding Impairment. Proof of the medically-determined impairment must be submitted with the taxpayer's claim for credit or refund of tax.

Joint Returns. Claims for credit or refund for a period in which a joint return was filed cannot be denied solely because one of the spouses on the return was not financially disabled. Such claims should be considered as they relate to the financially disabled spouse.

Length of Mental Impairment for Purposes of (2)(b), above. An individual with a mental impairment who consults with a psychiatrist automatically has proof that the impairment continued for the entire period of consultation. If a mental impairment renders a person incapable of caring for himself or herself for part of a period but not for other parts, a physician must, as required above, identify the period during which the taxpayer was prevented from managing his or her financial affairs. In order for the exception to apply, the physician must determine that the person was continuously impaired for a period described in (2)(b), above. The impairment may vary between a severe and a moderate impairment during a period described in (2)(b), above, but it may not vary between severely impaired and not impaired

Taxpayer qualifies for the financial disability exception for the 2000 tax year. The period of limitations for filing a claim for refund for tax year 2000 was suspended from March 31, 2003 through November 11, 2003 (225 days). Thus, the 225 days are added to April 15, 2004, the normal RSED, and the RSED for Taxpayer is November 26, 2004. The refund claim was timely because it was filed on or before November 26, 2004.

While the disease impaired Taxpayer intermittently during the period of limitations for filing a claim for refund for the 2000 tax year to the extent that during those intermittent periods he could not manage his financial affairs, he did not become impaired for a continuous period described in (2)(b), above, until late in 2005 after the RSED had passed. Accordingly, Taxpayer does not qualify for the financial disability exception for the 2000 tax year and the refund claim is not timely.

In general, a deadline for filing a claim for credit or refund may be postponed for a period of up to one year as specified by the Secretary of the Treasury for taxpayers (individuals and businesses) determined by the Secretary of the Treasury to be affected by a Presidentially declared disaster. See IRC § 7508A.

The length of postponement period will be prescribed in a Notice (or other guidance including an IRS News Release) issued by the Service regarding a particular disaster.

Treas. Reg. § 301.7508A-1(d)(1) defines an "Affected Taxpayer" as any of the following:

In addition, the Service may determine that other persons are affected taxpayers. Therefore, taxpayers located outside of the covered disaster area may qualify for relief. The "Affected Taxpayers" will be prescribed in a Notice (or other guidance including an IRS News Release) regarding a particular disaster.

Local Service officials may use their authority to provide extensions of time to file (under IRC § 6081) and to pay (under IRC § 6161) to provide relief for a local disaster whose magnitude does not warrant a Presidential declaration of disaster. The officials, however, do not have the authority to provide an extension of time to file a claim for credit or refund; an extension may be obtained by entering an agreement to extend the period of limitations on assessment, which automatically extends the period for filing a claim. See IRM 25.6.6.6.4, Extension of Time by Agreement.

In General. A deadline for filing a claim for credit or refund may be postponed for a period of up to one year as specified by the Secretary of the Treasury for an individual determined by the Secretary to be affected by a terroristic or military action. See IRC § 7508A.

Length of Postponement. See IRM 25.6.6.8.2, Presidentially Declared Disaster Area, at (2).

Persons Covered. See IRM 25.6.6.8.2, Presidentially Declared Disaster Area, at (3).

List of Presidentially Declared Terroristic or Military Actions.

See IRM 25.6.16, Combat Zone for Statute Processing.

The period of limitations for submitting a claim for credit or refund is not suspended due to identity theft.

This situation could arise where a taxpayer has paid an adjustment resulting from a mismatch between a Form 1099 listing the taxpayer as a payee and the taxpayer later suspects the Form 1099 involved identity theft. If the taxpayer contacts the Service and claims that identity theft may have lead the taxpayer to owe and to pay tax on income the taxpayer did not receive, the IRS employee must follow the step below in resolving the claim for credit or refund:

If the taxpayer claims a credit or refund, refer to the appropriate IRM for processing the claim such as IRM 21.6.2.4.4.3(2), Determining if the Refund Should be Released. This IRM section deals with adjusting for TIN-related problems when a taxpayer indicates or states that his or her identity was stolen.

Refund claims that relate to items reported on a partnership return may require special consideration. If the partnership is not subject to the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), apply normal statute of limitations to the return of a partner. If, however, the partnership is subject to TEFRA provisions, refer the case to Examination for assistance. IRC §§ 6511( g) and 7422(h) provide that taxpayers can claim refunds attributable to partnership items only in accordance with the TEFRA procedures (IRC §§ 6227, 6228 and 6230(c)).

Joint liability, but separate taxpayers. Each spouse has a separate interest in the jointly reported income and a separate interest in any overpayment. Rev. Rul. 74-611, 1974-2 C.B. 399. Each spouse’s share of an overpayment claimed on a joint return is determined under Rev. Rul. 80-7, 1980-1 C.B. 296, and only that share may be credited to one spouse's unpaid separate tax liability. In a community property state each spouse is considered to own one-half of the total wages and the income from community property. Rev. Rul. 85-70, 1985-1 C.B. 361.

Agreements extending period of limitations for assessment. Both spouses must consent to an extension of the period of limitations on assessment; however, if one spouse executes a consent for a year in which a joint return was filed, the consent will be effective for that spouse.

Changing from separate to joint status and the date the joint return is considered filed. If the conditions set by IRC § 6013(b)(2) for changing from separate to joint status are satisfied, a joint return may be filed within three years from the due date (without extensions) for filing returns for such tax year. For purposes of filing a claim for credit or refund, the joint return is deemed filed on the last day prescribed for filing the return for that taxpayer (determined without regard to any extension of time granted to either spouse).

A change in the tax laws which is made retroactive to earlier tax years does not automatically permit a claim for a refund for such a year when the claim is barred by the period of limitations. Congress must expressly provide a waiver of the period of limitations for the retroactive statute. See United States v. Zacks, 375 U.S. 59 (1963).

General Procedures for Claims to Take Account of Waiver.

In general, IRC §§ 1311–1314 authorizes correction of errors in years otherwise barred by the statute of limitations. These mitigation provisions apply only in seven specific circumstances described in IRC § 1312. A claim for refund based on the mitigation provisions must be filed within 1 year of the determination providing the basis for the claim.

Special Rule for Employment Tax and Worker Misclassifications. IRC § 6521 provides a special mitigation rule with respect to the tax on self-employment income (SECA) and the tax under the Federal Insurance Contributions Act (FICA). It authorizes an offsetting adjustment if:

Length of Period. Unless otherwise provided, a taxpayer must file a suit for recovery of a non-tax claim within a six-year period. See 28 U.S.C. § 2401 for suits in the district courts and 28 U.S.C. § 2501 for suits in the Court of Federal Claims.

Starting Point of the Period for Filing Suit. The starting point depends on the nature of the claim. The starting date is based on the common law rule for when the period for the cause of action begins; i.e., when all the events which fix the government's alleged liability have occurred and the taxpayer was or should have been aware of their existence. See General Instruments Corp. v. United States, 33 Fed.Cl. 4, 7-8 (1995).

Overpayment interest accrues from the date of overpayment of the tax to a date not more than 30 days prior to the date of the refund under IRC § 6611. Generally, the interest is automatically computed and credited or paid when a tax claim is allowed.

Submission of an Administrative Claim. A claim is not required before filing suit. An administrative claim may be allowed and paid upon request at any time before the period for filing suit at (3), below, expires. See Rev. Rul. 57-242, 1957-1 C.B. 452.

Length of the Period for Filing Suit. The six-year period under 28 U.S.C. §§ 2401 and 2501 applies to the filing of a suit. See Rev. Rul. 56-506, 1956-2 C.B. 959.

Starting Point of the Period for Filing Suit. A cause of action for overpayment interest begins to run when a claim for credit or refund is allowed. The date of the allowance of the refund is the date the Commissioner or his delegate signs the schedule on which the overpayment is listed as provided under IRC § 6407. See Rev. Rul. 57–242.

A claim for interest netting under IRC § 6621(d) is treated the same as a claim for overpayment interest under IRC § 6611. See Rev. Proc. 2000-26, 2000-1 C.B. 1257.

The Service may offset an overpayment of federal tax with certain past-due debts of the taxpayer. A joint filer whose share of an overpayment is applied to offset a spouse’s past-due debt may file Form 8379 for that share.

Submission of an Administrative Claim. A claim is not required before filing suit. An allocation may be allowed and paid upon request at any time before the period for filing suit at (3), below, expires.

Length of the Period for Filing Suit. The six-year period under 28 U.S.C. §§ 2401 and 2501 applies to the filing of a suit.

Starting Point of the Period for Filing Suit. A cause of action for overpayment interest begins to run when a claim for credit or refund is allowed. The date of the allowance of the refund is the date the Commissioner or his delegate signs the schedule on which the overpayment is listed as provided under IRC § 6407.

This section describes procedures for processing claims filed on Form 8697, Interest Computation Under the Look-Back Method for Completed Long-Term Contracts.

Submission of an Administrative Claim. A claim is not required before filing suit. An administrative claim may be allowed and paid upon request at any time before the period for filing suit at (3), below, expires.

Length of the Period for Filing Suit. The six-year period under 28 U.S.C. §§ 2401 and 2501 applies to the filing of a suit. See Treas. Reg. § 1.460-6(f)(3).

Starting Point of the Period for Filing Suit. In general, an action for overpayment interest begins to run at the end of the year in which a long-term contract is completed because that is when the government’s liability becomes fixed. However, other dates may be given consideration depending on the facts. See General Instruments Corp. v. United States criterion in IRM 25.6.6.11.1(2), above.

A taxpayer may claim a depreciation deduction under the income forecast method under IRC § 167 for certain property. A look-back method may provide a taxpayer with interest for overestimating income which is treated similar to lookback interest in IRM 25.6.6.11.5, Claim on Form 8697, Interest Computation Under the Look-Back Method for Completed Long-Term Contracts, above.

[Reserved]

Rev. Proc. 2005–18, 2005–13 IRB 798 provides procedures for deposits made pursuant to I.R.C. § 6603. A request for the return of the deposit is a non-tax claim against the federal government.

Submission of an Administrative Claim. A section 6603 deposit is not subject to a claim for credit or refund as an overpayment until the deposit is applied by the Service as a payment of an assessment tax. Rev. Proc. 2005–18 provides procedures for taxpayers to request the return of a deposit prior to the time the Service has used the deposit for payment of tax.

Length of the Period for Filing Suit. The six-year period under 28 U.S.C. § 2501 applies to the filing of a suit. (District courts do not have subject matter jurisdiction over a suit for return of a deposit).

Starting Point of the Period for Filing Suit. A cause of action for overpayment interest begins to run when the Service denies the request for return of the deposit.

Required Payments. A partnership or an S corporation may elect a taxable year that differs from its otherwise required taxable year under I.R.C. § 444, but the entity may have to make any payments required by I.R.C. § 7519. For an applicable election year beginning after 1987, the required payment is due and payable without assessment or notice, on or before May 15 of the calendar year following the calendar year in which the applicable election year begins. See Treas. Reg. § 1.7519-2T(a)(4)(ii). In general, the entity must both file a Form 8752, Required Payment or Refund under Section 7519, showing the required payment (even if the amount of such payment is zero), and pay the full amount of the required payment as reported for each year in which the entity’s § 444 election is in effect. See I.R.C. § 7519(e)(2)(B) and Treas. Reg. § 1.7519-2T(a).

Required Payment is a Deposit. A required payment submitted with Form 8752 generally is treated as a deposit. A claim for refund submitted on that form is a request for a return of an overdeposit and is not a claim for refund of tax. See IRM 21.7.4.

Submission of an Administrative Claim. Treas. Reg. 1.7519-2T(a)(6) provides that a partnership or S corporation should file a claim for refund, but only provides the earliest date on which the request may be made. As the Service has not mandated a filing date, an administrative claim may be allowed and paid upon request at any time before the period for filing suit at (4), below, expires.

Length of the Period for Filing Suit. The six-year period under 28 U.S.C. §§ 2401 and 2501 applies to the filing of a suit for the refund of an overdeposit.

Starting Point of the Period for Filing Suit. In general, the entity's right to a refund of any excess payment becomes fixed on the due date for the Form 8752 on which a refund should be claimed. The entity’s six-year period for filing a suit for refund of an overdeposit begins on the date the entity liquidates or terminates its section 444 election. See Section 7519(c)(2).

Required Payments Sometimes Treated As Employment Taxes. Although a required payment generally is treated as a deposit, for some purposes it is treated like an employment tax. See section 7519(f)(1) regarding the assessment and collection of required payments. The treatment as an employment tax does not affect how a taxpayer claims a refund of a section 7519 payment.

Prior Years’ Forms 8752. I.R.C. § 7519 requires a running deposit balance that is adjusted each year. The Service has difficulty properly process a claim for an overpayment for any year until the entity has filed the required Forms 8752 for all prior applicable election years. An entity’s required payment may increase, decease or stay the same from any one year to the next, depending on the entity’s base year income and the applicable tax rates. Nevertheless, the Service in its discretion may process claims without delinquent Forms 8752 if it otherwise has sufficient information to determine whether any refund is due, or whether interest and penalties for the prior years are due and owing.

The following is two examples of a Partnership electing to file Form 8752 under I.R.C. § 444 election: