Supplemental claims: acceptable amendment or new claim?

• Author: Keenan, John

For taxpayers, there are certain acts for which timeliness is crucial, such as filing a refund claim with the IRS within the statute of limitation. A refund claim is required to set forth in detail each ground upon which a credit or a refund is claimed and to include facts sufficient to apprise the IRS of the exact basis thereof. Occasionally, a taxpayer may want to amend a previously filed refund claim at a time outside the refund statute of limitation period. Certain factors dictate whether this supplemental claim--also referred to as a revised supplemental claim--is deemed to be an amendment to an existing claim, which may be allowed because it is based on the grounds established in a previous timely filed claim, or a new claim, which may be disallowed because it is outside the time period allotted for filing a refund claim for such items.

Background

Before discussing the various factors that distinguish whether a supplemental claim is deemed to be an amendment to a claim versus a new claim, it is important to understand the basic principles of refund claims and the time frames for filing such items. Sec. 6511(a) sets forth the limitation period for filing a credit or refund claim. The Taxpayer may file a claim for credit or refund of an overpayment of tax within the later of (1) three years from the time the return was filed or (2) two years from the time the tax was paid. If the taxpayer filed no return, the claim must be filed within two years from the time the tax was paid. No credit or refund will be allowed or made after the limitation period in Sec. 6511 (a) has expired unless the taxpayer filed a refund or a credit claim within that period (Sec. 6511(b)(1)).

A refund claim must not only be timely but also satisfy certain requirements for specificity regarding the legal and factual grounds on which the claim is based. Regulations under Sec. 6402 provide the following requirements for refund claims:

(b) Grounds set forth in claim. (1) No refund or credit will be allowed after the expiration of the statutory period of limitation applicable to the filing of a claim there for except upon one or more of the grounds set forth in a claim filed before the expiration of such period. The claim must set forth in detail each ground upon which a credit or refund is claimed and facts sufficient to apprise the Commissioner of the exact basis thereof. The statement of the grounds and facts must be verified by a written declaration that it is made under the penalties of perjury. A claim which does not comply with this paragraph will not be considered for any purpose as a claim for refund or credit. [Regs. Sec. 301.6402-2(b)(l)] Once an...