If I were due a federal refund in 2011 and owed in 2012 and did not file either year, can I apply the 2011 refund to the 2012 bill? I know I can no longer claim the refund for 2011. Will the IRS handle this automatically?

In reality, there were 2 years I was due a refund and a year I will owe a substantial amount.

I am using FreeTaxUSA to prepare the prior year returns. They have an option to apply the refund to next years taxes, but I don't see any difference in the 1040 that's being created.

  • Interesting question, it doesn't really seem fair that they can call your refund forfeited but still collect on other years, but I don't see anything to suggest that's not how it works.
    – Hart CO
    May 9, 2017 at 19:47
  • I would expect that "being unable to claim the refund" means you cannot claim it in any form, neither as a direct payment to you nor as a credit on another return.
    – BrenBarn
    May 10, 2017 at 2:41

1 Answer 1


It doesn't appear that you can apply refunds due that are outside the statute of limitations to years where taxes are due. According to the IRS Tax Topic 153:

An original return claiming a refund must be filed within 3 years of its due date for a refund to be allowed in most instances. After the expiration of the three-year period, the refund statute prevents the issuance of a refund check and the application of any credits, including overpayments of estimated or withholding taxes, to other tax years that are underpaid.

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