IRS Will Now Give You More Time To Make Tax Refund Claims

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The 2023 tax season officially started on January 23. For taxpayers who haven’t requested a filing extension, who are serving in the military abroad or who don’t reside in a recognized disaster area (Alabama, California and Georgia), the season ends on “Tax Day,” April 18.

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However, certain taxpayers who took advantage of the postponed filing deadlines due to the COVID-19 pandemic will have more time to make tax refunds claims, according to the Internal Revenue Service (IRS). New deadline information is to be released by the IRS in a statement on March 13, per Accounting Today.

Following a recommendation to Congress from the National Taxpayer Advocate’s (NTA) Erin Collins, the IRS announced it will amend the “lookback period” to allow tax refunds for certain taxpayers who would have otherwise been denied past-year claims.

In its Notice 2023-21, the IRS discussed discrepancies between dates “for filing a claim for credit or refund and the three-year lookback period caused by postponing certain filing deadlines for filing seasons 2020 and 2021,” per the NTA.

In order to receive a tax refund, any tax payments must be paid within a lookback period of three years, plus any time given as an extension. As a result of the pandemic, the IRS postponed filing deadlines to Jul. 15 in 2020 and to May 17 in 2021.

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But, unlike typical tax filing extensions, these pandemic postponements didn’t address extending lookback periods. The result is that many taxpayers may fall under the false assumption that they have more time to file than allowed.

For example, if a taxpayer used a postponement to file taxes up to Jul. 15, 2020, they would likely expect to have three years from that date to file a refund claim. But that isn’t the case. Without an IRS amendment to the lookback period, that taxpayer would be out of luck if they don’t file by Apr. 18, 2023.

Similarly, without extending the lookback period for 2024, taxpayers who took advantage of the 2021 pandemic filing postponement would be prevented from receiving refunds to which they are entitled if they didn’t file by Monday, Apr. 15, 2024.

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Despite calling for permanent reform for disaster relief postponements or similar circumstances in the future, Collins welcomed the forthcoming lookback period amendment by the IRS. Writing on the National Taxpayer Advocate blog, Collins stated: “Taxpayers will never know this was a potential problem as the IRS did the right thing and proactively fixed the lookback period to eliminate challenges and refund denials for taxpayers.”

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“Without IRS intervention, any claims for credit or refund filed during the postponed period three years later that included withholding or estimated taxes would have been denied because the withheld amount(s) would have been credited to the taxpayer’s account as of April 15, outside the three-year lookback period,” she added.

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About the Author

David Nadelle is a freelance editor and writer based in Ottawa, Canada. After working in the energy industry for 18 years, he decided to change careers in 2016 and concentrate full-time on all aspects of writing. He recently completed a technical communication diploma and holds previous university degrees in journalism, sociology and criminology. David has covered a wide variety of financial and lifestyle topics for numerous publications and has experience copywriting for the retail industry.
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