Page 21 - 2020 Publication 17

14:38 - 19-Jan-2021
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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
also have childcare expenses for which you can support items shown on your return until the pe- • Download the free IRS2Go app to your
claim a credit. riod of limitations for that return runs out. smart phone and use it to check your re-
Home. Your basic records should enable you The period of limitations is the period of time fund status.
to determine the basis or adjusted basis of your in which you can amend your return to claim a • Call the automated refund hotline at
home. You need this information to determine if credit or refund or the IRS can assess addi- 800-829-1954.
you have a gain or loss when you sell your tional tax. Table 1-7 contains the periods of limi-
otherwise stated, the years refer to the period Interest on Refunds
home or to figure depreciation if you use part of tations that apply to income tax returns. Unless
your home for business purposes or for rent.
Your records should show the purchase price, beginning after the return was filed. Returns
settlement or closing costs, and the cost of any filed before the due date are treated as being If you are due a refund, you may get interest on
it. The interest rates are adjusted quarterly.
improvements. They may also show any casu- filed on the due date.
alty losses deducted and insurance reimburse- If the refund is made within 45 days after the
ments for casualty losses. Table 1-7. Period of Limitations due date of your return, no interest will be paid.
For detailed information on basis, including If you file your return after the due date (includ-
which settlement or closing costs are included IF you... THEN the ing extensions), no interest will be paid if the re-
in the basis of your home, see Pub. 551, Basis period is... fund is made within 45 days after the date you
filed. If the refund isn't made within this 45-day
of Assets. 1 File a return and (2), 3 years. period, interest will be paid from the due date of
When you sell your home, your records (3), and (4) don't apply the return or from the date you filed, whichever
should show the sales price and any selling ex- to you is later.
penses, such as commissions. For information Accepting a refund check doesn't change
on selling your home, see Pub. 523, Selling 2 Don't report income 6 years.
Your Home. that you should and it is your right to claim an additional refund and in-
terest. File your claim within the period of time
Investments. Your basic records should ena- more than 25% of the that applies. See Amended Returns and Claims
ble you to determine your basis in an invest- gross income shown on for Refund, later. If you don't accept a refund
ment and whether you have a gain or loss when your return check, no more interest will be paid on the over-
you sell it. Investments include stocks, bonds, 3 File a fraudulent return No limit. payment included in the check.
and mutual funds. Your records should show
the purchase price, sales price, and commis- 4 Don't file a return No limit. Interest on erroneous refund. All or part of
any interest you were charged on an erroneous
sions. They may also show any reinvested divi- 5 File a claim for credit or The later of 3
dends, stock splits and dividends, load refund after you filed years or 2 refund will generally be forgiven. Any interest
charged for the period before demand for re-
charges, and original issue discount (OID). your return years after tax payment was made will be forgiven unless:
For information on stocks, bonds, and mu- was paid.
tual funds, see Pub. 550, Investment Income 1. You, or a person related to you, caused
and Expenses, and Pub. 551. 6 File a claim for a loss 7 years. the erroneous refund in any way; or
from worthless 2. The refund is more than $50,000.
Proof of Payment securities or bad debt For example, if you claimed a refund of $100
deduction
One of your basic records is proof of payment. on your return, but the IRS made an error and
You should keep these records to support cer- sent you $1,000, you wouldn't be charged inter-
tain amounts shown on your tax return. Proof of Property. Keep records relating to property est for the time you held the $900 difference.
payment alone isn't proof that the item claimed until the period of limitations expires for the year You must, however, repay the $900 when the
on your return is allowable. You should also in which you dispose of the property in a taxa- IRS asks.
keep other documents that will help prove that ble disposition. You must keep these records to
the item is allowable. figure your basis for computing gain or loss Change of Address
Generally, you prove payment with a cash when you sell or otherwise dispose of the prop-
receipt, financial account statement, credit card erty.
statement, canceled check, or substitute check. Generally, if you received property in a non- If you have moved, file your return using your
If you make payments in cash, you should get a taxable exchange, your basis in that property is new address.
dated and signed receipt showing the amount the same as the basis of the property you gave If you move after you filed your return, you
and the reason for the payment. up. You must keep the records on the old prop- should give the IRS clear and concise notifica-
If you make payments using your bank ac- erty, as well as the new property, until the pe- tion of your change of address. The notification
count, you may be able to prove payment with riod of limitations expires for the year in which may be written, electronic, or oral. Send written
an account statement. you dispose of the new property in a taxable notification to the Internal Revenue Service
Center serving your old address. You can use
Account statements. You may be able to disposition. Form 8822, Change of Address. If you are ex-
prove payment with a legible financial account pecting a refund, also notify the post office serv-
statement prepared by your bank or other finan- Refund Information ing your old address. This will help in forwarding
cial institution. your check to your new address (unless you
Pay statements. You may have deductible ex- You can go online to check the status of your chose direct deposit of your refund). For more
2020 refund 24 hours after the IRS receives
penses withheld from your paycheck, such as your e-filed return, or 4 weeks after you mail a information, see Revenue Procedure 2010-16,
2010-19 I.R.B. 664, available at IRS.gov/irb/
medical insurance premiums. You should keep paper return. If you filed Form 8379 with your
your year-end or final pay statements as proof return, allow 14 weeks (11 weeks if you filed 2010-19_IRB/ar07.html.
Be sure to include your SSN (and the name
of payment of these expenses. electronically) before checking your refund sta- and SSN of your spouse if you filed a joint re-
tus. Be sure to have a copy of your 2020 tax re- turn) in any correspondence with the IRS.
How Long To Keep turn handy because you will need to know the
and the exact whole-dollar amount of the re- What if I Made
Records filing status, the first SSN shown on the return,
You must keep your records as long as they fund. To check on your refund, do one of the a Mistake?
following.
may be needed for the administration of any
provision of the Internal Revenue Code. Gener- • Go to IRS.gov/Refunds. Errors may delay your refund or result in notices
ally, this means you must keep records that being sent to you. If you discover an error, you
can file an amended return or claim for refund.
Chapter 1 Filing Information Page 17