In short
A claim for refund of overpaid tax, such as an amended individual return on Form 1040-X, must be filed within 3 years after the return was filed or 2 years after the tax was paid, whichever is later.
Key takeaways
- Under the 3-year rule, the refund is limited to tax paid in the 3 years before the claim plus any filing extension.
- Claims for bad debts and worthless securities have 7 years.
- A return filed early is treated as filed on its due date.
Where it's tested
REG: Federal Tax Procedures & Penalties — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
A taxpayer's prior-year AGI was $250,000 with a tax liability of $50,000. To avoid an underpayment penalty for the current year using the prior-year safe harbor, how much must the taxpayer pay in through withholding and estimates?