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What To Do If You Overpay Taxes

What To Do If You Overpay Taxes

Overpayment on taxes is an all too common occurrence for individuals who make errors when filing. The errors most often come from basic mistakes including identify theft, connection to the tax debt of your former spouse, or misunderstandings from incorrect IRA conversions. Unfortunately, for some tax payers, it may be years before they realize the error and hope to claim their overpaid taxes. In most cases, the time to get funds back from the IRS has passed. If you think you have overpaid your taxes, there are a few things that can be done.

  1. Check the Timing. The IRS has very specific stipulations about claiming overpaid funds. The established timeline for filing must be within two years of making a payment, three years of examination change, or three years after filing the return.
  2. Contact Attorneys Tax Relief. If you believe you have overpaid, and are within the acceptable time frame, it is important to consult a tax lawyer. There are several steps to take to claim your refund. This starts with filing Form 843 which can be completed through IRS.GOV. Tax payers must send their claim in the form of a letter. This must include the heading “THIS IS A PROTECTIVE CLAIM”. Within the letter, the course of action to prove the claim is valid should be outlined including former years you are referring to, form numbers, and social security number.
  3. Consult Form 8857. Individuals who are owed a refund due to debt connections with a former spouse will be asked to fill out Form 8857. This is a request of “innocence” regarding such debt against the individual you are no longer married to. The IRS rejects this letter the first time more often than not. Tax payers must be diligent in refiling until it is accepted.
  4. Check your Credit. A tax lawyer can also help you navigate collections disputes, audits, and identity theft problems. Checking your credit report will alert you of any suspicious activity that needs your attention.

Most importantly, if you realized that you have overpaid – don’t freak out. This happens to a large percentage of individuals for one reason or another. The process of receiving owed funds can be difficult and time consuming. Prepare yourself to meet with a tax professional by gathering all receipts, copies of your returns, and any relevant documents (divorce decree, etc.) that support that you have overpaid. If you do not wish to seek professional assistance for this matter, you can go about it on your own. The first step is to request an appeals hearing. The case may or may not be resolved during this time. If it is not resolved, you can also contact Taxpayer Advocate Service which operates separate from the IRS to ensure tax payers receive fair treatment from the government entity on their quest to receive a refund due.