A claim for refund is made when a taxpayer has overpaid taxes. This can happen through a mistake by the taxpayer in his filing, or by the IRS in assessing a filing. It can also happen where an employer has made a mistake in the amount deducted from an employee's paycheck.
The most common way for an individual to make a claim for refund is through filing an amended tax form known as 1040x. Once filed, this will replace the original 1040 form as the taxpayer's official tax return for administrative purposes. The IRS requires that taxpayers allow between eight and 12 weeks for the 1040x to be processed.
To assist with a claim for refund, a taxpayer can complete and submit Form 4506. This is a request for a copy of a previous tax return. It can also be used for requesting a full transcript, which details the current tax status of the taxpayer and the calculations that led to a previous tax demand.
A statute of limitations affects an individual making a claim for refund. The usual deadline is three years after the original deadline for filing. This applies even if the taxpayer filed his return earlier than requires, or missed the original deadline. If the taxpayer previously requested and received an extension to the original filing, the statute of limitations runs for three years after the extended deadline.
It is possible that even if a refund is granted, the taxpayer will not receive all of the money. Some or all of the money may instead be used by the government to pay certain amounts owed by the taxpayer. These include outstanding tax liabilities from previous years, overdue child support, and debts owed to a government agency. There is no appeal process available against this money being deducted from a refund.
In other circumstances, a claim for refund is covered by form 843, the full title of which is a Claim for Refund and Request for Abatement. The latter term refers to a request to have an amount of additional money a taxpayer owes retrospectively reduced. Specifically the form covers a reduction in interest or penalties that results from the IRS's delays or mistakes, or where there is another legal reason for the amount to be abated. Though the process is largely the same, from a legal and administrative perspective, refunds cover tax itself and abatements cover additional amounts such as interest or penalties. Form 843 has a short space for explaining the reasons behind the abatement request, though it is permissible to attach a covering letter that goes into more detail.