Welfare-payment refund claims depend on filing and payment dates

Plain-English summary

Chief Counsel analyzed refund claims under legislation enacted September 26, 2014. Claims involving returns filed before September 26, 2011 generally may be denied, subject to extensions, unresolved timely claims, and payments made within two years of the claim. Claims for returns filed on or after September 26, 2012 generally are timely if filed by the Act's September 26, 2015 deadline, with a three-year lookback plus any filing extension. Returns filed in the intervening year require case-specific application of the two-year or three-year lookback rules in section 6511. The advice also explains that refunding within 45 days of the claim stops post-claim overpayment interest under section 6611(e)(2).

Ruling snapshot

• Question: Which welfare-payment refund claims are timely and how much may be refunded?
• Outcome: Advice given based on the return-filing, claim-filing, payment, and extension dates.
• Key authorities: IRC §§ 6501(c)(4), 6511, and 6611.

Full text (IRS public release)

ID: CCA_2015030417141710
UILC: 6511.00-00, 6511.01-00

Number: 201515025
Release Date: 4/10/2015
From:
Sent: Wednesday, March 04, 2015 17:14:18
To:
Cc:
Bcc:
Subject: FW: FYI - Alert issued for General Welfare Claims

Dear ----------,

The quick and simple answer is this:

Absent unusual circumstances, claims for returns filed before 09/26/2011 may be
denied.

Absent unusual circumstances, claims for returns filed after 09/26/2012 are timely and
should be worked.

Also as a general rule, any payments made within 2 years of the refund claim are
refundable. § 6511(a) and (b).

The more nuanced answer is:

First let’s take claims for refunds for returns filed before 09/26/2011, which is the date
three years before the enactment of the Act on 09/26/2014. Absent an agreement
extending the period of assessment pursuant to §6501(c)(4) that would extend the
period for claiming a refund under §6511(a) until 6 months after the end of the extended
assessment period, pursuant to §6511(c), or a timely refund claim that has not been
acted on by the Service, no refund will be allowed for these returns, except from
payments made within 2 years of the date of the refund claim (as above). In most
circumstances, this would mean that claims for refund for timely 2010 Forms 1040 that
were not filed on extension could be safely denied.

Next are returns filed on or after 09/26/2012. Provided that the taxpayer files a claim by
09/26/2015, which is the extended date provided in § 2(d)(2) of the Act, payments made
within 3 years of the date of the claim, plus the period of any filing extension, would be
creditable or refundable. This would capture 2011 returns filed on extension on or after
09/26/2012 and returns for 2012, 2013, and 2014, but it would not cover timely 2011
returns filed without an extension.
2

The middle ground is where the facts will have to be scrutinized: For returns filed
between 09/26/2011 and 09/26/2012, amounts paid within 2 years of the refund claim
will be creditable or refundable (as always). Whether any other amounts can be
refunded will turn on whether the claim were filed within 3 years of the date the taxpayer
filed the return. If not, then the standard 2 years before claim filing look-back period
would apply. § 6511(b)(2)(B). If the claim were filed within 3 years of the return, then
the look-back period will be 3 years plus the duration of any filing
extension. § 6511(b)(2)(A).

-------------- raised the question of the 45-day interest rule, which I don’t believe we
discussed at length on the call on Monday. Where an overpayment is refunded within
45 days after a claim for refund is made, no interest is allowable for the period from the
date the claim is filed until the date the refund is made. § 6611(e)(2). If the Service is
unable to pay refunds allowable under the Code and the Act within 45 days of the claim,
then the Service will be liable for overpayment interest, generally from the date of the
overpayment to a date not more than 30 days before the refund
issues. § 6611(b)(2). But if the Service makes the refunds within 45 days of the claim,
then the Service may stop accruing overpayment interest on the date of the claim.

I hope this is helpful, but please let me know if there are questions.

Thanks,

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