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ANOTHER REASON TO NOT GET BEHIND ON TAX FILING
April 27, 2007
Not everybody who fails to file a tax return is a "Tax Honesty" adherent. Some folks have every intention of filing their return, but life gets in the way. Some are chronic procrastinators; others are workaholics who just never make the time. Some are just disorganized and irresponsible. And some figure - "I'm sure I'm overpaid. I'll just get on it when I'm not so busy and gut my refunds."
This can be costly, as Daniel Ostrom learned yesterday in Tax Court. Mr. Ostrom didn't get around to filing his 1997 and 1998 returns until the summer of 2001. He was due a refund of $2,772 on his 1997 return, but he owed $2,383. He paid $101 and attempted to apply his 1997 overpayment to 1998.
Unfortunately for Mr. Ostrom, the statute of limitations for claiming his 1997 refund expired on April 15, 2001, about two months before he filed his 1997 return. His ability to use that refund against any other taxes died that day. Procrastination cost Mr. Ostrom $2,772.
The moral? Even if you have a refund coming, file your returns on time, or you may end up making an unexpected contribution to the government.
Cite: Ostrom, T.C. Summ. Op. 2007-66
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