There are many different reasons why the IRS may seize, refuse to send, delay or deny any Claim for Refund you have made. Any tax return you file is considered a "Claim for Refund".
Return Processing Errors
The IRS will send you an immediate Notice if you've made an error & your return cannot be processed. Usually, it's a failure to provide signature or a missing form. (See Letter 12C, Form 3531, Letter 2416C or Letter 143C) If you made an error on an AMENDED return, the IRS will send you Letter 178C explaining what was missing or what they want of you.
If there was a problem when they tried to Directly Deposit your refund into a bank account they will send some version of Notice CP53. (CP53A, CP53C, CP53D)
Sometimes they think a social security number the return was wrong on the return & they are holding your money until you straighten it out. (See Notice CP54)
The IRS may send you a Notice CP31 stating that your refund was returned to them. Follow the advice in the notice but you may have to file Form 3911 to get another check.
If you send them a response, they may send you a letter similar to Letter 4314C, explaining that they are reviewing your evidence & will respond in 60 days. However, don't depend on them to respond within that time period. Remain vigilant & call the IRS if you have questions!
Economic Impact Stimulus Payment
There have been a flood of calls concerning when the Economic Impact Stimulus Payments will arrive and for how much they will be. In answer to the 2nd question, you can consult the Publication 5486, Instructions for the Recovery Rebate Credit, which essentially tell you to complete the Recovery Rebate Credit Worksheet and report it on Line 30 of your tax return. If you file a return, you'll get a payment.
The question of when they will arrive is more diffcult. No one can predict the timetable of the government. You can make a Form 3911 request if the check was lost, or you can send a letter to the Taxpayer Advocate Service but none of these will speed up the process. In fact, if the check was lost, the process will be slower. If you make an inquiry or a Form 3911 request the IRS will respond with a Letter 129C, indicating (barely) what is going on with your money. In all cases you will simply have to wait.
Sometimes, the IRS sends a larger refund than they should have & they'll ask for their money back with Letter 510C. If you fail to respond, they will send you a Letter 3414C informing you of the debt & your failure to respond. Eventually, they'll send your file to Collections to be enforced according to Law.
Claims for Refund
Sometimes, you file a return & the IRS accepts it initially. Then, you get a Notice CP18 stating they have delayed sending part of your money because they have "questions". (See also Notice CP05) Then, they may ultimately deny it partially (Notice CP20) or completely. (Notice CP49 or Notice CP92)
Other times, the IRS refuses to send you a refund until you file. (Notice CP63, Notice CP88, Notice CP44, & perhaps, Letter 288C).
They may hold your refund until they "complete a more thorough review". If so, they will indicate the reasons with a Notice CP07. They may also send Letter 916C refusing to make a refund because your "supporting information was not complete."
They may send a Notice CP80, Notice CP81 or Letter 112C stating that you will lose a refund if you don't file on time.
Very often, a refund will get taken by the IRS to pay for you back taxes or for an ex-spouse. (Notice CP39 & Notice CP42) The IRS may take your refund to be applied to other Federal or State debt you owe. (Letter 3179C)The IRS seizes business refunds as well. (Notice CP138)
Each year, spouses refuse to file Married Filing Jointly because they don't want their money to be taken to pay for the other spouses back tax debt. Some of them have to apply for "Injured Spouse" status to get their money.
Another common ground for a Claim for Refund is when the IRS denies your refund completely or partially. (See Letters 105C & 106C)
Whenever the IRS has your money, you have a Claim for Refund. It is up to you to pursue it correctly. The IRS cannot help you.
Each of the above letters will have a different tactic. Furthermore, each year may have different strategies.
When the IRS takes your money, you can pursue a Claim for Refund. A Claim for Refund can be pursued in US District Court, not solely at the IRS level. Hopefully, you can resolve your Claim prior to Court, but at least you know the option exists.
If the IRS took your money because of back taxes then you'll have to determine if you owe it or not. Get your "Account Transcripts" which will tell you everything about your account. If so, explore your Collection solutions.
If you don't owe the prior debt, you'll need to determine if the tax returns are filed or not. Get your Account Transcripts to see. If the returns are not filed, use the Unfiled Returns Prep Steps.
If the returns are filed, then determine if an Amended Return or a separate Claim for Refund (Form 843) is necessary. Either of these would be advisable if you need to initiate or make a further claim.
If an amended return is not necessary then you can pursue your seized money as a Claim for Refund, with all the avenues & remedies available to you.
So, in most instances you'll file some sort of Appeal, depending on whether the IRS is collecting from you or not. However, remember that you can always pursue your Claim in US District Court if necessary.
But, in all cases, you'll need to follow the procedure. Be sure to file all documents on time. Of course, if you have any questions or trouble please give us a call!
J. David Hopkins, JD, LLM