Extension of the Filing for Refund Claims: Form 907 vs. Form 872

Maryland Tax Refund Claim Attorneys

As many tax practitioners know, claims for tax refunds from the IRS must be made within either 3 years from the time the return was filed or 2 years from the time the tax was paid, whichever period expires later. Internal Revenue Code §6511(a). In certain cases, the filing of an extension can work to lengthen the time period for claiming a refund. The IRS issues refunds for a particular year if you requested an extension and subsequently filed a tax return within the time parameters form making the claim. See I.R.C. §6511(c).

Hence, herein the issue we discuss is the review of which Form is sufficient to extend the statute of limitations to collect on a refund. Specifically, there is a Form 907: Agreement to Extend Time to Bring Suit and a Form 872: Consent to Extend Time to Assess Tax. Generally, each form serves the purpose of providing a particular extension for certain respective tax issues. The sufficiency of these two Forms as it relates to an extension for refund claims was discussed in a recent court case, Branch v. U.S., 2011 WL 814439 (Fed. Cl., 2011). In Branch, the issue is whether the Form 872 is sufficient for the taxpayer to extend the period for filing for a refund claim. The taxpayer claimed that the 2 year limitations period for filing a refund claim was extended by written agreement between the taxpayer and IRS through the Form 872. The Court held that Form 872 was insufficient for such purposes.

The Court reasoned that the only exception to Internal Revenue Code Section 6532(a)(1), which concerns the strict refund filing deadline occurs when a district director, a director of an IRS service center, or an assistant regional commissioner of the IRS enters into a written agreement with the taxpayer to extend the statute of limitations. This is specifically standardized only on Form 907. Therefore, while Form 907 operates to extend the refund request filing period by specific written agreement between the IRS and taxpayer, Form 872 does not.