Navigating the Statute of Limitations Maze in the Federal Income Tax Arena

Individual taxpayers frequently realize that a tax return filed with the IRS needs to be changed for various reasons. Perhaps previously estimated amounts are later discovered to have been in error, prior ignorance may have been rectified, or new interpretations of law have been rendered by the courts or the IRS. The need to adjust a previously filed return may be discovered in the year of filing, or several years later.This article discusses the unusual maze that must be navigated by a taxpayer desiring to file a claim for refund resulting from a change in a previously filed return. The scope is limited to an individual and an unusual specific set of facts. However, the general principles illustrate the problems that may be encountered by practitioners and taxpayers in this otherwise seemingly straight forward area.