On July 13, U.S. Rep. Neal Dunn (FL-02) introduced the Refund Rights for Taxpayers Act, legislation that rectifies an unfairness in current law that gives the IRS three times as long to collect back taxes as it gives taxpayers time to collect refunds.
The legislation is supported by Americans for Tax Reform, the nation’s leading anti-tax group.
The issue was brought to Dunn’s attention when a constituent reached out for help to recoup taxes erroneously paid to the Internal Revenue Service. Right now, taxpayers only have three years to claim overpaid taxes before the money is given to the Treasury Department. Unfortunately, since more than three years had elapsed since the overpayment, the 2nd District resident was outside the statute of limitations. He was unable to recoup his money and left with no recourse.
The IRS, on the other hand, has 10 years to collect back taxes, during which time it has the ability to levy a taxpayer’s income, personal bank account, or seize a taxpayer’s property in order to collect on their debt.
The Refund Rights for Taxpayer Act puts taxpayers and the IRS on equal footing. Under the bill, taxpayers will have seven, not three, years to claim overpaid taxes, and the IRS will have seven, not 10, years to seek back taxes.
“The IRS works for taxpayers, not the other way around,” Dunn said. “This bill is based on the simple principle that taxpayers should be able to collect from the IRS for at least as long as the IRS can collect from them. The Refund Rights for Taxpayers Act rectifies the unfairness in current law. And like many other good legislative ideas, it comes from the frustrations and concerns expressed by hardworking taxpayers at home.”
“I write in support of the ‘The Refund Rights for Taxpayers Act, legislation that ensures taxpayers and the IRS have the same amount of time to correct any mistake that resulted in the payment of either too much or too few in taxes,” said Grover Norquist, president of Americans for Tax Reform, in a letter to Dunn. “This legislation is a simple, yet important solution that ensures taxpayers and the IRS are held to the same standard.”
The IRS has announced that it is holding one million individual taxpayer refunds totaling more than $1 billion.
“With $1 billion worth of refunds at stake, American taxpayers deserve to have their refund rights protected against the IRS,” added Dunn.