Today we hear from Raj in San Jose, CA who’s got this question “The FTB assessed taxes in 2002 because of stocks I sold. I didn’t make money on those stock transactions, so I didn’t bother to file. FTB attached the proceeds from the sale of my home in 2005. If I file a return showing I owe nothing for 2002, will I be able to get that money back or am I limited somehow by the statute of limitations?”
What’s taken you so long?
If FTB had taken my money in 2005, I’d have done everything in my power to get that back. Heck, I’d have called a tax pro to help me prevent them from taking the money in the first place. (uh, if I didn’t already know how to do that.)
In fact, before FTB put that lien on your property, and before they grabbed your sales proceeds, FTB sent you notice after notice asking for that tax return and/or telling you what they were going to assess you. What in the world were you doing during all that time? And how did you expect FTB or IRS to know you didn’t have any profits on those stock sales if you never filed a tax return? What, do you think they’re clairvoyant? (OK, maybe sometimes they seem to be.)
Anyway, yes. You can try to file that 2002 tax return to correct the balance due – and change it to -0-.
Can you get the money back from California? YES!
You’re in luck. California FTB’s statute of limitations to claim a refund is 4 years.
IRS’s statute of limitations for refunds, is only 2 years after you’ve paid it. I can’t believe IRS didn’t also hit you up for the money.
So, I suggest that you pull your records together and file that tax return to get your refund. Fast! You’ll also get interest. While you’re doing that, go ahead and file the IRS return, too.
Close the statute of limitations for IRS to audit or collect, as well.
And remember, you can find answers to all kinds of questions about tax levies and all kinds of other tax issues, free. Where? Where else? At TaxMama.com[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the subscribe link and join us.]
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