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I had filed 2010 US tax returns to the best of my knowledge using one of the famous online websites. Fast forward now (2014), I realized that I was in US for half a year and should have filed as nonresident alien instead of resident alien. The online tool provided no information about it back then; instead it provided me with credits that are available only for the resident aliens.

I amended my tax and sent a check a couple of weeks ago. I received a letter from IRS saying the credit has been disallowed as it's more than 3 years after I filed tax. It doesn't ask me to pay more, but mentions that I can appeal if needed or bring a suit.

It also doesn't say if they are refund the check I had sent with the amendment. I will call them soon.

Isn't there a way to correct the mistake? Is there a fear of audit of 2010 returns even though the statute of limitation has expired?

The reason for amendment was that resident aliens should show worldwide income and that would increase my income whereas nonresident aliens don't have to show worldwide income which wouldn't increase the income, however, it doesn't allow to claim certain credits.

Thoughts?

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    Not sure I understand the problem... You wanted to pay more tax, IRS said they don't want your money because its beyond statute - so why exactly are you worried?
    – littleadv
    Oct 21, 2014 at 5:04
  • As is usually the case, SOL is not always 3 years. Please read the link below. US federal taxes statutes of limitation
    – Osa E
    Oct 21, 2014 at 17:01
  • Hi, I didn't want to pay more tax; I wanted to return the excess refund I got. I wanted to know if there is a way to correct it so that there will not be a problem in the future.
    – PleaseTakeMyMoney
    Oct 21, 2014 at 21:45
  • You did what you were supposed to do. What problems are you expecting?
    – littleadv
    Oct 22, 2014 at 2:05
  • @littleadv Problems like IRS audit or IRS coming back later and asking me to pay with interest and other penalties. I don't know all tax codes like IRS does. IRS may argue that I filed returns incorrectly to begin with so the amendment and subsequent returned check doesn't matter etc. SOL is different when IRS has to get money. It's different when there is false or fraud.
    – PleaseTakeMyMoney
    Oct 22, 2014 at 19:45

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As I understand it, you discovered that you had underpaid your taxes, you sent the IRS an amended return with a check for the additional amount due, and the IRS rejected it saying the statute of limitations had expired.

So ... keep the letter from the IRS. If they come back later and say you owe this money, produce this letter to show you tried to pay it and they said you didn't owe anything. The IRS can be nasty, but if you have a letter from them saying you don't owe anything, I would think that would be strong evidence in court that you don't owe anything if they tried to come after you later.

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  • IRS didn't say I owe nothing; they said they disallow my claim for credit.
    – PleaseTakeMyMoney
    Oct 22, 2014 at 19:51
  • @PleaseTakeMyMoney Since we don't exactly know what you submitted and can't see what you got back - it is really hard to help you. If you're worried - take the forms you mailed and the response you got back to a local tax adviser (EA/CPA licensed in your State) and ask for advice.
    – littleadv
    Oct 23, 2014 at 0:07
  • I'm sorry, I guess I'm confused about your post then. You say you sent them a check, but you're claiming an additional credit? If you're claiming a credit you missed the first time, wouldn't they owe you money? Or do you mean that after recalculating your taxes, you concluded that you owe them $X more than you originally paid, but now they're saying you owe more than $X?
    – Jay
    Oct 23, 2014 at 13:19
  • I'm not claiming an additional credit. I amended return to adjust status as nonresident. This means that I can't claim a credit that I originally did. So, I owe them money. You are confusing "credit". If I have to get money back it is called refund, If I owe them money it is called credit. They disallowed my claim for credit.
    – PleaseTakeMyMoney
    Oct 24, 2014 at 2:13
  • I called up the number on the notice. There was a mistake on their end. If IRS has to get money, the SOL is not 3 years. They are reprocessing and taking the money. Thanks for your help.
    – PleaseTakeMyMoney
    Oct 24, 2014 at 2:16

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