Late return may trigger three-year refund lookback

Plain-English summary

Chief Counsel tentatively agreed that a late-filed return could itself serve as a timely refund claim under IRC § 6511(a). Because the claim was filed within three years of the return, the advice reasoned that the three-year lookback in § 6511(b)(2)(A) should limit the refundable amount. The writer cautioned that the branch lacked subject-matter jurisdiction over refund limitation periods. The writer also flagged a possible complication because the return followed a substitute-for-return assessment, which might require more facts and additional analysis about whether the filing counted as a return for the relevant purpose.

Ruling snapshot

• Question: Does a late-filed return used as a refund claim receive the three-year lookback under IRC § 6511(b)(2)(A)?
• Outcome: Tentative advice that the three-year lookback applies, subject to further analysis of the post-SFR filing
• Key authorities: IRC § 6511(a) and (b)(2)(A); Rev. Rul. 76-511

Full text (IRS public release)

ID: CCA_2014110612540057 [Third Party Communication:

UILC: 6511.01-00 Date of Communication: Month DD, YYYY]

Number: 201447033
Release Date: 11/21/2014
From:
Sent: Thursday, November 06, 2014 12:54:00 PM
To:
Cc:
Bcc:
Subject: RE: 6511(b) Question

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My instinct is that TAS is correct. In the situation you describe, the claim is timely under
section 6511(a) because the return is a claim for refund. See Rev. Rul. 76-511. I don’t
think that the limitation on an amount of refund depends on whether the return was
timely filed. I think the period in 6511(b)(2)(A) is applicable because the claim is timely
based on the 3-year period in 6511(a) (i.e., it was filed within 3 years from the date on
which the late-filed return was filed, because it was filed within 3 years of
itself). Accordingly, I would think that there is a three-year look-back with respect to the
limitation on amount.

But I have two concerns. First, my branch doesn’t have subject matter jurisdiction for
refund periods of limitation (oddly enough). Accordingly, I am cc’ing ---------------(a 1/2
branch chief with subject matter jurisdiction). Second, I don’t know if we take a different
position based on the fact that the return was filed post-SFR. I know that in bankruptcy
Counsel takes some funny positions about whether a return filed post-SFR that does
nothing more than copy the numbers off of the SFR (or perhaps that lowers them a bit
by claiming the 6013 joint return election) is in fact a return for certain purposes. So
perhaps there is some additional analysis required, but I suspect that ------ will know that
as well, and it likely will require additional facts.

Note that the ruling cited above also indicates that the three-year period is available for
look-back purposes (but again, it does not involve a prior SFR assessment).