IRS Restructuring and Reform Act of 1998
3202 - Suspension of Statute of Limitations for Disability
A. Provision(s) covered: RRA § 3202 Suspension of Statute of Limitations for Disability (Amends § 6511 of the Code) Equitable Tolling of Statute of Limitations
B. Background: Generally, a taxpayer must file a refund claim within three years of the filing of a return or within two years of the payment of the tax, whichever period expires later. A refund claim not filed within this time period is rejected as untimely. The Supreme Court determined in Brockamp v. United States that there was provision in the Internal Revenue Code for equitable tolling of the statute of limitations.
C. Change(s): This change will allow for the suspension of the running of the statue of limitations on refunds for periods of time during which an individual taxpayer is unable to manage his or her financial affairs by reason of a medically determinable physical or mental impairment that can be expected to result in death or that lasts for a continuous period of not less than 12 months. However, a taxpayer will not be considered financially disabled during the time period that the individual's spouse or other authorized person acts on behalf of the individual. To claim financial disability, proof of such an impairment will have to be submitted.
D. Impact: The suspension of the statute of limitations during a period of financial disability will allow refund claims outside of the time periods currently set forth in § 6511(a). Taxpayers will have to be alerted to this change and Service persons giving out information and processing claims for refunds or credits will have to be aware of this change.
E. Necessary Actions
F. Other Special Comments: