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Published:   |   Last Updated: February 8, 2024

TAS ensures statutes are appropriately enforced

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Every year the Taxpayer Advocate Service (TAS) helps thousands of people with tax problems. This story is only one of many examples of how TAS helps resolve taxpayer issues. All personal details are removed to protect the privacy of the taxpayer.

When a taxpayer does not file a required tax return, the IRS has the option of preparing the return on their behalf, which is commonly called a Substitute for Return (SFR). After the tax on the SFR is assessed, the taxpayer can file their own return to reduce tax and claim any tax credits for which they are eligible. One taxpayer filed a tax return well after the statute of limitations to claim a refund had expired. The tax return showed significantly less tax than the IRS computed. The tax return also included refundable credits including the Earned Income Tax Credit, but did not claim a refund. The IRS accepted the taxpayer’s figures and reduced the tax. However, the IRS issued a formal claim disallowance for the refundable credits, citing Internal Revenue Code (IRC) § 6511(b)(2)(B) as prohibiting refundable credits, even though the return did not claim a refund. 

The IRC only prohibits refunding prepaid credits after the statute of limitations for the refund has expired. It does not prohibit the IRS from allowing these credits to reduce tax. With the help of a technical advisor, the case advocate persuaded the IRS to allow the refundable credits, protecting the taxpayer’s right to pay no more than the correct amount of tax. As a result, the taxpayer was relieved of thousands of dollars in penalty and interest charges and able to fully pay the small remaining balance due. 

When working with the Taxpayer Advocate Service, each individual or business taxpayer is assigned to an advocate who listens to the problem and helps the taxpayer understand what needs to be done to resolve their tax issue. TAS advocates will do everything they can to help taxpayers and work with them every step of the way. Occasionally we feature stories of taxpayers and advocates who work together to resolve complex tax issues. Read more TAS success stories.

Learn more about whether TAS can help you: Can TAS help me with my tax issue?

Can TAS help me with my tax issue?

Learn more about whether TAS can help you.

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