Tax Refund Litigation

Tax refund litigation is more common than one might envision. Imagine if you are unlucky enough to pay more federal taxes than what is owed – this could be due to an administrative error, outsourced payroll errors, or ignorance of the tax law. Once you determine that you have paid too much in taxes, you then amend your return, and to your shock and disbelief, Uncle Sam informs you that the IRS will not refund your overpayment.

Prior to filing a tax refund case in either the U.S. District Court or U.S. Court of Federal Claims, you must do the following:

  • Pay the amount of tax in controversy to the IRS.
  • Request a refund from the IRS.
  • Have your refund denied by the IRS.
  • And then exhaust all available IRS administrative remedies.

The time limits on filing refund claims and refund suits are no less forgiving than the deadlines governing U.S. Tax Court jurisdiction; the time limits just run longer. Generally, a claim must be filed within 3 years of filing a return or within 2 years of payment, whichever comes later. Then a refund suit may be filed within the window of time beginning 6 months after the claim is filed, or sooner if the IRS renders a decision on the claim prior to the 6 months after the claim has been filed, and ending 2 years after the denial of the claim by the IRS.

At times, the IRS will not deny a claim. Until recently, it has been understood that, in those situations, no statute of limitations governs when a refund suit may be filed.  However, the government could claim laches (which is a legal term for unreasonable delay in making an assertion or claim) if the delay is excessive. One recent U.S. District Court case held that refund suits are barred if they are not filed within 6  years and 6 months of the filing of the refund claim.

If you believe that you are due for a refund that the IRS has unreasonably denied, consult with a tax attorney at Law Offices of Christy Lee, P.C.  We will evaluate the legitimacy of the refund and the stance the IRS has taken with regard to its denial of the refund and appear on your behalf before the court while protecting your rights as a taxpayer.