IRS PMTA: Overpayment of Taxes Due to Additional Levied Funds Entitles Taxpayer to Refund Only as to Taxes Paid During Two-Year Look-Back Period from Date Credit Allowed (IRC §6511)

If the IRS becomes aware of an overpayment, including as a result of additional levied funds, and a claim for credit or refund is not filed within three years of the filing of the return, a taxpayer is only entitled to a refund of the taxes paid during the two-year (look-back) period immediately preceding the date the credit or refund is allowed under I.R.C. §6511(b)(2)(B), assuming there was no agreement extending the period of limitations on assessment under §6501(c)(4), the Chief Counsel’s Office advised. The IRS has encountered situations in which tax liabilities are fully paid, ...