Lookback era prolonged for refunds associated with pandemic postponements

On Monday, in Realize 2023-21, the IRS lengthened the lookback era for refund claims for returns with due dates that had been deferred through Realize 2021-21 or Realize 2020-23, which postponed the due dates for submitting positive tax returns and making sure tax bills all the way through the COVID-19 pandemic.

Underneath the brand new realize, in figuring out the start of the lookback era for taxpayers with due dates postponed through Realize 2021-21, the IRS will fail to remember the era from April 15, 2020, to July 15, 2020, and for taxpayers with due dates postponed through Realize 2020-23, from April 15, 2021, to Might 17, 2021. This may increasingly align the ones classes with the postponed go back submitting due dates.

When the COVID-19 pandemic hit, the IRS in Realize 2021-21 and Realize 2020-23 postponed some submitting due dates for returns, but it surely didn’t extend the lookback era beneath Sec. 6511(b)(2)(A). That supposed that some bills may fall outdoor the lookback era if taxpayers filed their returns after April 15 in 2020 and 2021. Thus, with out the alternate, “[i]f the bills fall outdoor of the lookback era, then, regardless of submitting a well timed refund declare, a taxpayer can’t be refunded the ones bills,” the IRS mentioned in a information liberate.

Nationwide Taxpayer Recommend Erin Collins mentioned in a weblog put up Monday that for tax yr 2019, just about 34 million returns had been filed within the postponement era and that almost 29 million had been filed within the postponement era for tax yr 2020.

“With out IRS intervention, any claims for credit score or refund filed all the way through the postponed era 3 years later that incorporated withholding or estimated taxes would had been denied since the withheld quantity(s) would had been credited to the taxpayer’s account as of April 15, outdoor the three-year lookback era,” Collins wrote.

Collins really useful that Congress must amend Sec. 6511(b)(2)(A) to make the comfort supplied in Realize 2023-21 everlasting, in order that it’ll practice each time the IRS supplies crisis aid through suspending the submitting time limits.

— To remark in this article or to indicate an concept for some other article, touch Martha Waggoner at [email protected].