Mar 19, 2008

Q & A: Filing Prior Year Returns For Refunds

QUESTION: I have owned a home since 2001. I am completely disabled and judgment proof and have not filed my income taxes due to my disability. Now that I am feeling better and more capable of filing tax returns, I am told that I can file a number of years back if I have all the forms (which I do.)
How many years back can I go and file retroactively so as to recover at least the interest expense I have paid to my mortgage company as well as to the income withheld from my long-term disability check provided by my last employer in 1991?
Can you help in explaining to me which direction I should proceed or if I even should considering filing at all because I have not filed at all of these years?

ANSWER: Generally, you may claim a refund only within three years from the time the tax was paid or withheld from wages. Under your circumstances, it appears you are able to file a return to claim refunds for taxes you paid in 2006 and 2007. There is an exception to this statute of limitations where if a taxpayer is deemed to be financially disabled the refund claim period can be extended. A taxpayer must have a medically determinable mental or physical impairment that has or can be expected to last for a continuous period of one year or more and renders the person unable to manage personal financial affairs. Be aware that this exception does not apply if a taxpayer's spouse or other person is authorized to act on behalf of the individual in financial matters.

1 responses:

IRS Help For You March 20, 2008 at 7:32 PM  

Thanks for writing about this Jimbo. Its good th know that the IRS will allow some addtional time for a circumstance such as this

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