It’s March 16. That means calendar-year corporation and S corporation returns are due today. Failure to file on time can be expensive. If you are filing or extending today, protect yourself by e-filing. If you must paper file, use Certified Mail, Return Receipt Requested, to document timely filing. If you can’t get to the post office before it closes, you can go to the FedEx or UPS stores, but make sure you use the right Authorized Private Delivery Service and send it to the proper service center street address, as private services can’t deliver to the service center post office box addresses.
Hah! Fooled you! The IRS last week issued a press release: IRS Has Refunds Totaling $1 Billion for People Who Have Not Filed a 2011 Federal Income Tax Return.
If you haven’t filed your 2011 return yet and you want to claim your refund, you’re in for a nasty surprise: you’re probably already too late.
Section 6511 of the Internal Revenue Code (NOT the “IRS Code.” Stop that!) says (my emphasis):
Claim for credit or refund of an overpayment of any tax imposed by this title in respect of which tax the taxpayer is required to file a return shall be filed by the taxpayer within 3 years from the time the return was filed or 2 years from the time the tax was paid, whichever of such periods expires the later, or if no return was filed by the taxpayer, within 2 years from the time the tax was paid.
That means for most nonfilers, it’s too late to get that 2011 refund, and it’s 2012 refunds that expire on April 15.
Don’t believe me? Then believe Robert Wood:
If you pay estimated taxes or have tax withholding on your paycheck but fail to file a return, you generally have only two years (not three) to try to get it back. Suppose you make tax payments (by withholding or estimated tax payments) but haven’t filed tax returns (shame on you!) for three or four years? When you file those long-past-due returns, overpayments in one year may not offset underpayments in another.
This is why it is an awful idea to fall behind on filing. If you have a refund coming, it dies in two years, but if you owe and don’t file, the statute of limitations never starts, and the IRS can come after you anytime. If you have refunds coming for some years, but owe on others, you don’t get to offset the expired refunds against the amounts you owe. Heads they win, tails you lose.
I wonder if they do high-fives at the IRS Service Centers when people file their 2011 returns looking to cash in on that $1 billion.
Related: Kay Bell, April 15, 2015, is deadline for unclaimed 2011 tax refunds
You mean that wasn’t a guitar mass at 2 a.m.? Tax Exempt Church Turns Out To Be A Night Club (Robert Wood).
Kristine Tidgren, Proving That Loan Was a Gift Requires Evidence (ISU-CALT). If it’s documented as a loan and the “lender” dies, it will be hard to convince the heirs that you weren’t supposed to pay it back.
Annette Nellen, Busy Season Updates – TPR and ACA. Some practical thoughts on this tax season’s biggest new challenges.
Jason Dinesen, Financing a Small Business, Part 4 of 5: Don’t Spend Money Just to Get Tax Deductions. A disappointing amount of this happens right at year-end.
Jim Maule, Who’s to Blame for Tax Fraud? “As to the first point, that tax software is not the reason for tax fraud, I agree.”
I went to a hockey game yesterday, and a wedding broke out:
There was a pretty good fight, too. Not involving the couple, I’ll hasten to add.
William McBride, Critics of Rubio-Lee Tax Reform Are Way Off the Mark (Tax Policy Blog):
In sum, there are many reasons to think the Rubio-Lee tax plan, or something similar, would have tremendous growth effects. The Tax Foundation’s macroeconomic tax model finds that the plan is indeed extremely pro-growth, while raising the after-tax incomes of families up and down the scale.
While critics may challenge the magnitude of these findings, given the current state of the economy and middle-class wages, this is a serious plan that should spur an honest debate over how best to overhaul our dysfunctional federal tax code.
He addresses doubters like William Gale.
Jennifer DePaul, Michigan House Kills Film Tax Credit, Florida Lawmakers Look to Revamp Theirs (Tax Analysts, $link):
Bill sponsor Rep. Dan Lauwers (R) said the film industry has “sapped the state’s budget without creating promised full-time jobs.”
“For every dollar of taxpayer money we have invested into film subsidies, the state has gotten 10 cents in return from that venture,” Lauwers said in a statement. “There are so many more worthwhile uses we can put that money toward.”
Jared Walczak, Film Tax Credits on the Chopping Block in Massachusetts (Tax Policy Blog)
After the targeting scandal had been underway for over a year, Mr. Koskinen testified that recovery efforts had been thorough, but the tapes and emails just couldn’t be found. As if to goad Republicans, he said that millions in taxpayer money was spent looking. Over 250 IRS employees spent 100,000 hours, costing taxpayers at least $14 million. However, the Treasury Inspector General has revealed that the IT people at the IRS say no one even asked them to recover the emails.
A new commissioner isn’t sufficient to make the IRS trustworthy, but it is necessary.
Caleb Newquist, PwC Gave Former Ways & Means Chairman Dave Camp a Job. (Going Concern) It may be tax season, but I suspect he’s not going to be looking at any 1040s.
Peter Reilly, Looks Like No Charitable Deduction For Gifts To Steak And You Know Day. No, not baked potatoes.