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TAX CLINIC

relied not only on the assessment statute
A question may arise of whether an SFR language found in Sec. 6501(b)(3) but
also on a series of decisions that nar-
is considered a return for purposes of the rowly interpreted Sec. 6020(b)(2)’s state-
statute of limitation on claims for refund. ment that all SFRs are “prima facie good
and sufficient for all legal purposes.” The
court in Healer relied heavily on an ear-
claim for credit or refund must be filed pursuant to Sec. 6020(b) does not start lier Tax Court case, Flagg, T.C. Memo.
within three years of the time the return the running of the period of limitation 1997-297, which characterized Sec.
was filed or two years from the time the for the purpose of tax assessment and 6020 authority to create an SFR primar-
tax was paid, whichever period expires collection, many other Code sections, ily as a recourse for the IRS where a
later. Where no return is filed, the claim including Sec. 6511, do not include such taxpayer fails to file a return. However,
for refund must be filed two years from straightforward provisions. Generally, in Flagg gives weight to the fact that Sec.
the time the tax was paid. Therefore, cases determining whether a return con- 6020 neither requires an SFR to be filed
filing a timely claim is the essential first stitutes a return that starts the statute of nor relieves taxpayers of their obligation
step to obtaining a credit or refund of limitation on claims for credit or refund, to file a return.
an overpayment. the return that starts the running of the Flagg also highlighted a number of
Sec. 6511(b) provides lookback pe- three-year Sec. 6511(a) statute is the cases in which an SFR was not deemed
riods limiting the amount of credit or return in which the taxpayer reports or good and sufficient for legal purposes
refund allowed, depending on the date is required to report the income (Greene, despite the language in Sec. 6020(b).
the return for the tax period in question 191 F.3d 1341 (Fed. Cir. 1999)). Federal appeals courts across the country
was filed. If a claim is filed within three In Healer, 115 T.C. 316 (2000), the have ruled that an SFR was not a return
years of filing the return, the taxpayer is Tax Court concluded that an SFR does when determining whether an election
entitled to a refund of taxes paid within not constitute a return for purposes of to file jointly was prohibited by Sec.
the three years immediately preceding the Sec. 6511 statute of limitation on 6013(b) (Millsap, 91 T.C. 926 (1988));
the filing of the claim, plus any exten- a claim for credit or refund. The court a taxpayer willfully failed to file a return
sion of time for filing the return (Sec.
6511(b)(2)(A)). If the claim for refund
is not filed within the three-year period,
a taxpayer is entitled to a refund of only
those taxes paid during the two years
immediately preceding the filing of the
claim (Sec. 6511(b)(2)(B)). Thus, prop-
erly determining the date a return was
filed for any given tax period dictates
whether a taxpayer’s claim for credit or
refund is allowable under Sec. 6511 and
whether the claim may be limited to the
taxes paid within the two years immedi-
ately preceding the claim.
Where an SFR and the refund
statute of limitation collide
As mentioned above, Sec. 6020(b)(2)
states that a return executed by the IRS
is “prima facie good and sufficient for IMAGE BY ALEKSANDR ZUBKOV/GETTY IMAGES
all legal purposes.” Courts have been re-
quired to examine the parameters of this
clause in a variety of contexts.
Unlike Sec. 6501(b)(3), which
explicitly states that an SFR executed

22 April 2023 The Tax Adviser