The Need for a Legislative Fix to Eliminate the Disaster Lookback Trap for Refund Claims
The IRS can postpone tax filing deadlines, particularly in disaster situations, to help taxpayers. However, this relief can sometimes lead to a hidden trap that prevents taxpayers from receiving a refund, even when a claim is filed on time. The issue lies in the “lookback period,” which limits the IRS from refunding taxes paid more than three years before the claim. When the filing deadline is postponed, the lookback period may not align, creating problems for taxpayers who aren't aware of both deadlines