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Amend return to change apply overpymt to refund?

Technical topics regarding tax preparation.
#1
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Is it possible to amend? For this particular client, we always apply overpymt to next year but due to Covid, client is projecting lower income and now wants a refund. We already filed his 1040.
 

#2
dave829  
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No, it's too late to make this change. See Georges, 916 F.2d 1520 (11th Cir. 1989); Martin Marietta Corp., 572 F.2d 839 (Ct.Cl. 1978).

https://law.justia.com/cases/federal/ap ... 20/207907/
https://scholar.google.com/scholar_case ... i=scholarr
 

#3
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hi thx Dave for the reply.

I told the client no, it can't be done. We will just file 2020 tax return as soon as practical to get refund back.
 

#4
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The question has been asked before. The answer is the same: It might not be too late. Depends what kind of mood the IRS is in when you, or the taxpayer, calls them. See IRM Sec 1.2.1.4.14, which references “undue financial hardship.” Just plead your case and you might have some luck. Forget about the amended return. Just do it over the phone. We’ve had success with that method in the past. Call on Friday, when everyone’s in a good mood.
 

#5
dave829  
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Jeff-Ohio wrote:We’ve had success with that method in the past.

And we've had the request denied. The IRS cited sec. 6513(d), especially the last part:
(d) OVERPAYMENT OF INCOME TAX CREDITED TO ESTIMATED TAX.—If any overpayment of income tax is, in accordance with section 6402(b), claimed as a credit against estimated tax for the succeeding taxable year, such amount shall be considered as a payment of the income tax for the succeeding taxable year (whether or not claimed as a credit in the return of estimated tax for such succeeding taxable year), and no claim for credit or refund of such overpayment shall be allowed for the taxable year in which the overpayment arises.
 

#6
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And we've had the request denied.

So what. If we have some wins and have some losses, that’s different than the “all losses” idea you proposed in Post #2.

There is more to this than cases and code sections. There is the human/IRS administrative element. That’s the point you’re missing. If IRS refuses to go along with you, you will not win in court, which is pretty much all of your citations are telling us. I agree with that. But that’s only if you get denied first. Obviously, the IRS wouldn’t have an IRM Section on this issue if changing one’s election was impossible.

And I’m already familiar with what 6513(d) says. I get it that an overpayment, once credited, is no longer an overpayment (that can be refunded). You see the same thing in 301.6402-3.
 

#7
dave829  
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Jeff-Ohio wrote:So what.

So what? I believe that it is best to advise clients about how the law applies to their particular facts, not to give them hopes that the IRS would grant some sort of unpredictable administrative relief depending upon the “mood” of the IRS agent we might encounter.
 

#8
CathysTaxes  
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Dave, you can tell the client about the regs and that there is a tiny possibility that the IRS will approve. You can also tell him your fee for the return and that you can't guarantee that it will work.
Cathy
CathysTaxes
 

#9
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You can also tell him your fee for the return and that you can't guarantee that it will work.


You wouldn’t do this through an amended return. You’d get a POA and call the IRS yourself or have the client call, after he’s prepped about what to say. I’d keep your time commitment here to a minimum, but if client wants the practitioner to call, okay fine.
 


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