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Member
 
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Last Login: 12/1/2009 12:47:02 PM
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we have a client who made a payment with the estate's extension... then filed the return more than 3 years later showing a refund of the amounts paid with the extension. the refund was denied as the statute had run on the overpayment according to IRS.
a new district court case (Blom vs US 2006-1 USTC P60,527) has held that an extension payment is a deposit and not a payment. thus, it allowed a refund after three years from the payment had passed.
1. interesting case
2. anyone had any experiences in this area?
3. assume that we would file a claim using the claim form rather than a supplemental 706?
IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any matters addressed herein. |
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Member
Group: Forum Members
Last Login: 12/1/2009 12:47:02 PM
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nothing like replying to your own post, but here goes!!
called irs e&g in los angeles for their input... estate attorneys here did not know how to handle this- but they did give me a person and phone number in the national "service campus"- called him and found out that there is no real procedure for this situation... that said he suggested using the claim (843) as a cover letter over the supplemental 706- so its a "do both" sorta answer.
anyone with thoughts on this case or procedure- post em up!!
IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any matters addressed herein. |
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| In our daily tax topics there was a story about an estate that was making annual principal installments for a 6166 election. The law firm discovered that a huge mistake was made and it was determined that the estate had erroneously paid over $800,000 in 6166 installments. When they tried to get money back, the IRS refused to refund anything that was beyond the statute of limitations.
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The following reference source may be helpful to you on this subject:
PPC's 706/709 Deskbook (page 22-31, Key Issue 22I - Requesting a Refund for Overpaid Taxes).
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Member
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Last Login: 12/1/2009 12:47:02 PM
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difference is that blom says that the extension payment is not a payment, but instead it is a deposit in the nature of a cash bond. which means that the statute should not start until the returns are filed. a 6166 payment is a real payment, so blom would not apply.
just got our claim rejected- reason was that we are not in the blom circuit !! so back to the drawing board- have to find out whether my client is willing to fund a continued fight on this- seems to me that the client's position is correct, if blom is good law.
Anonymous (10/25/2006)
In our daily tax topics there was a story about an estate that was making annual principal installments for a 6166 election. The law firm discovered that a huge mistake was made and it was determined that the estate had erroneously paid over $800,000 in 6166 installments. When they tried to get money back, the IRS refused to refund anything that was beyond the statute of limitations.
IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any matters addressed herein. |
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Member
Group: Forum Members
Last Login: 12/1/2009 12:47:02 PM
Posts: 44,
Visits: 58
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update:
claim rejected, and appeal prepared- because of the lack of case law in the 9th circuit, our client will consider sitting on the appeal until close to the expiration of time to file it (two years)...
we have advised that the risk of this strategy would be the possible decision in the 9th circuit going the other way-
IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any matters addressed herein. |
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