Can I Receive a Refund From the IRS for Overpaid Taxes?

 Posted on November 20, 2019 in Taxation Law

In previous blogs, we have discussed the many consequences of not paying your taxes in full. However, sometimes a person has the opposite problem: the overpayment of taxes. If you have inadvertently or mistakenly paid more than your fair share of taxes, you may wonder if there is a way to get that extra money back. Whether or not the IRS will refund your money is based on many factors. Read on to learn about your options if you have overpaid your taxes and how a qualified tax lawyer can help.

Getting a Refund From the IRS

If you have overpaid the Internal Revenue Service (IRS), you may be able to receive a refund. If the IRS is aware that you overpaid, the agency may correct the issue by refunding you the extra balance. For example, if your tax return shows that you owe $2,000, and you send the IRS a check for $3,000, the IRS may refund you the extra $1,000 without issue. However, the situation becomes more complicated when the IRS is not aware of the overpayment. 

Mistakes such as failing to claim all possible credits and deductions will superfluously inflate your tax bill. For example, if you were entitled to the Earned Income Tax Credit and did not claim it, the amount you owe the IRS will be higher than it should be, but the IRS may not know it, because the credit was not reflected on your tax return. Another common mistake occurs when business owners are entitled to carry a net loss from a prior year and fail to do so. If the overpayment is due to a filing error on your part, reclaiming the money may be difficult.

Filing an Amended Return

There are two main ways to file a refund claim for overpayment of taxes. The first is to file an amended return that corrects the error you had previously made. The other option is to file a Form 843 Claim for Refund and Request for Abatement. On this form, you must clearly describe the reasons you are requesting a refund. 

A third option exists, but only in certain circumstances. Depending on your situation, you may be able to file an informal claim for a refund through a letter to the IRS. The letter should explain why you are claiming the refund and the amount of money you are asking the IRS to return to you. It is highly recommended that you consult an experienced tax attorney for help with deciding how to seek a refund of overpaid taxes.

Contact a San Jose, CA Tax Refund Attorney

If you have overpaid your taxes, do not wait to take action. The statute of limitations for a refund claim is 3 years after the date you filed the return or 2 years after the overpayment is made – whichever is later. Speak with a highly skilled San Jose tax law attorney at John D. Teter Law Offices to get the help you need. Call our office at 408-866-1810 today to schedule a consultation.

Sources:

https://www.marketwatch.com/story/how-to-deal-with-the-irs-to-resolve-tax-mistakes

https://www.irs.gov/irm/part35/irm_35-008-003#idm140689605525872

https://www.irs.gov/newsroom/ten-facts-on-filing-an-amended-tax-return