Refund claims involving a Saturday, Sunday or legal holiday.

• Author: O'Driscoll, David

A recent revenue ruling presents three scenarios to clarify the effect of Sec. 7503 on the limitations periods for refund claims involving a due date falling on a Saturday, Sunday or legal holiday.

Situation 1: X and Y timely filed their 1994 joint income tax return on Wed., March 1, 1995; the due date was Sat.,April 15,1995. On Fri., April 17, 1998, they filed a refund claim for a portion of the income taxes withheld from their wages in 1994.

To satisfy Sec. 6511 (a), X and Y had to file their 1994 refund claim within three years of the date they filed their 1994 return, or two years from the time they paid the tax, whichever is later. Sec. 6513(b)(1) deems the wages withheld from income during 1994 as paid on April 15,1995, more than two years before the April 17, 1998 refund claim; thus, the refund claim will not fall within the prescribed two-year period.

X and Y's refund claim also fails to fall within Sec. 6511(a)'s three-year period. Although they filed their joint return on March 1, 1995, Sec. 6513(a) treats the return as filed on April 15, 1995. Because they filed their refund claim on Fri.,April 17, 1998, two days more than three years after April 15, 1995, Sec. 6511 (a) bars their claim.

Sec. 7503 does not alter this result. Sec. 7503 applies only if (1) the last day prescribed falls on a Saturday, Sunday or legal holiday and (2) the taxpayer files on the next succeeding day that is not a Saturday, Sunday or legal holiday. In this case, Sec. 7503 does not apply to the filing of the return on March 1, 1995, because that filing did not occur on the next day succeeding Sat., April 15, 1995, that was not a Saturday, Sunday or legal holiday, nor does it apply to the refund claim filing, because the last day to file the claim was Wed., April 15, 1998, not a Saturday, Sunday or legal holiday. The three-year period within which the taxpayers had to file a refund claim began immediately after the deemed filing and payment date of April 15, 1995, and expired after April 15, 1998.

Situation 2: P timely filed a request for a four-month automatic extension to file a 1997 return. The automatic extension extended the due date from Wed., April 15, 1998, until Sat., Aug. 15, 1998. However, P did not file the 1997 return until Fri., Aug. 17, 2001, three years and two days later.

That return included a refund claim on...