Claim for tax refund untimely, court says.

Byline: Eric T. Berkman

Taxpayers who overpaid their state taxes in 2005 and requested a refund nearly three years later when they finally filed their return waited too long to make their claim, a District Court judge has ruled in a case of first impression.

G.L. 1956, 44-30-87, the state statute of limitations for claiming tax refunds or credits, states that any claim must be made "within three years from the time the return was filed" or "two years from the time the tax was paid, whichever of these periods expires later" or if no return has been filed "within two years from the time the tax was paid."

Tax Administrator David M. Sullivan argued that because the taxpayers didn't file an original return when it was due in 2005, the applicable limitations period was two years from the date taxes were paid and that the three-year period was only available where the original return had previously been filed.

Judge Anthony Capraro agreed.

"[I]t is clear from the stipulated facts that the Taxpayers 2004 tax was deemed paid on April 15, 2005," wrote Capraro. "Since Taxpayers paid the tax on April 15, 2005, Taxpayers had to make a claim by April 15, 2007. The stipulated facts indicate that the Taxpayers did not file a claim until February 25, 2008. Thus the Taxpayers are outside the clear meaning of the two year credit claim."

Regarding the alternate three-year limitations period in the statute, Capraro said it was "clear and unambiguous" that the statute's statement that a filing must be "within three years from the time the return was filed," means three years after the filing of a return.

"Within the three year period brings it to February 25, 2011," Capraro said. "[I]t was stipulated that no tax was paid by taxpayers during that time."

Neither Bernard J. Lemos of the Division of Taxation in Providence, who represented the tax commissioner, nor Robert J. Ameen of Pawtucket, who represented the taxpayers, could be reached for comment prior to deadline.

The 22-page decision is Shippee v. Sullivan, Lawyers Weekly No. 63-025-18. The full text of the ruling can be ordered here.

Late returns

Ralph N. Shippee and Beatrice H. Shippee, both now deceased, lived in Florida with a seasonal residence in Rhode Island. The Shippees' son, Ralph N. Shippee Jr., and his wife Mary, also maintained a seasonal residence in Rhode Island while living in Florida.

On Jan. 27, 2005, Ralph Sr. and Beatrice remitted $2,500 in estimated taxes for the year 2004 to the Tax...