First Court of Appeals holds that estate tax payers are not entitled to a second filing extension; also refund claim was untimely filed

The Appeals Court has held in Dickdow v US pursuant to 26 U.S.C. § 6511(a), a taxpayer seeking such a refund must file his refund claim within three years of filing the tax return or within two years from the time the tax was paid, whichever is later. Furthermore, for taxpayers who claim a refund within three years of  filing the return, § 6511(b)(2)(A) substantively limits the amount of any such refund to the portion of the tax paid within the three years immediately preceding the refund claim, plus the period of any extension of time for filing the return.

Dickow paid the estate taxes on October 10, 2003, and filed the estate tax return on September 30, 2004, but did not file the refund request until September 10, 2007. The IRS denied the claim on the ground that the refund sought was outside the lookback period set forth in § 6511(b)(2)(A).

The precise question on appeal was whether it was error for the IRS to conclude that § 6511(b)(2)(A) and its implementing regulations bar the requested refund because Dickow was not entitled to a second extension of the filing deadline that determined the estate’s eligibility for the refund.  The Appeals Court upheld the lower court where in order to determine whether Dickow received filing extensions that rendered his refund request timely, the court analyzed 26 U.S.C. § 6081(a) and its implementing regulations. The court determined that § 6081(a) was ambiguous as to whether the IRS could grant more than one six-month extension. However, the court found that the implementing regulations, as codified in Treasury Regulation § 20.6081-1, were clear that the IRS lacked the authority to grant Dickow more than one six-month extension. Because Dickow’s claim was filed more than three years plus six months after his payment, his refund request was untimely.

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