Rev. Rul. 76-511

Advice has been requested whether the refund of an overpayment of income tax is barred under the circumstances described below.

During the calendar year 1972, A's employer withheld Federal income tax from A's wages. On April 30, 1976, A filed a 1972 Federal income tax return showing an overpayment of tax. A indicated on the return that the overpayment was to be refunded. A had not requested an extension of time for filing the return.

Section 6402(a) of the Internal Revenue Code of 1954 provides that, in the case of any overpayment, the Secretary or the Secretary's delegate, within the applicable period of limitations, may credit the amount of such overpayment, including any interest allowed thereon, against any liability in respect of an internal revenue tax on the part of the person who made the overpayment and shall refund any balance to such person.

Section 301.6402-3(b)(1) of the Regulations on Procedure and Administration provides that a properly executed individual income tax return shall at the election of the taxpayer be a claim for refund within the meaning of sections 6402 and 6511 of the Code for the amount of the overpayment disclosed by such return. For purposes of section 6511, the claim shall be considered as filed on the date on which the return is considered as filed. A return shall be a claim for refund if it contains a statement setting forth the amount determined as an overpayment and advising that such amount shall be refunded to the taxpayer.

Section 6511(a) of the Code provides that a claim for credit or refund of an overpayment of any tax must be filed within 3 years from the time the return was filed or 2 years from the time the tax was paid, whichever of such periods expires the later, or if no return was filed by the taxpayer, within 2 years from the time the tax was paid.

Section 6511(b)(1) of the Code provides that no credit or refund shall be allowed after the expiration of the period of limitation prescribed in section 6511(a), unless a claim therefor is timely filed. Section 6511(b)(2)(A) provides that if the claim was filed within 3 years from the date the return was filed, the amount of the credit or refund shall not exceed the amount of tax paid within the period immediately preceding the filing of the claim, equal to 3 years plus the period of any extension of time for filing the return.

Section 6513(b)(1) of the Code provides that, for the purpose of section 6511, any tax withheld from wages during any calendar year shall, in respect of the wage earner, be deemed to have been paid on the 15th day of the fourth month following the close of the wage earner's taxable year.

In this case, A filed a claim for refund within the 3-year period of limitation prescribed by section 6511(a) of the Code, because, under section 301.6402-3 of the regulations, A's 1972 income tax return was a claim for refund. However, under the provisions of section 6513(b)(1), the overpayment is deemed to have been made on April 15, 1973, which is not within the 3-year period immediately preceding April 30, 1976, the date the claim was filed. Therefore, although the claim for refund was timely filed, allowance of the refund is specifically barred by the provisions of section 6511(b)(2)(A).

If A had filed the 1972 income tax return on April 1, 1976, the refund would have been allowable since the overpayment would have been made within the 3-year period immediately preceding the filing of the claim.