The National Taxpayer Advocate (NTA) recently recommended the IRS temporarily postpone the two-year time limit for taxpayers to file a lawsuit to contest the agency’s disallowance of a claim for refund or credit.
The NTA’s Erin Collins also recommended the IRS allow more time to resolve such disputes administratively.
Collins also warned taxpayers and their representatives that the time limit applies regardless of whether the taxpayer is pursuing an administrative appeal. Taxpayers may mistakenly believe that disputing a claim disallowance extends the time for its consideration, she said.
Taxpayers are more likely in recent years to fall afoul of the limitation period as the IRS struggles with its backlog of correspondence and returns, she said. Read more.