Recovery Credit recovery?

[TaxmannEA]

I have a client (for now anyway) who was late in filing their 2007 returns due to the death of a spouse and injuries received in an auto accident. The income on the 2007 return would have resulted in a $1200 Recovery Rebate Credit. The return was filed too late to get the credit, however. The 2008 figures result in a substantial NOL, so there is no rebate generated for 2008.

This person insists that there is a form or "paper" that can be filed to get the missed credit from 2007. I know of no such procedure and have informed Client of this, but they are insistent to the point of harrassment. I just need some confirmation that I am correct on this, or that the form or procedure does exist so that I can file it and be done. I don't want to fire a client if I am wrong. Any comments appreciated.

[Tax Prep by Deb]

I have a client (for now anyway) who was late in filing their 2007 returns due to the death of a spouse and injuries received in an auto accident. The income on the 2007 return would have resulted in a $1200 Recovery Rebate Credit. The return was filed too late to get the credit, however. The 2008 figures result in a substantial NOL, so there is no rebate generated for 2008.

This person insists that there is a form or "paper" that can be filed to get the missed credit from 2007. I know of no such procedure and have informed Client of this, but they are insistent to the point of harrassment. I just need some confirmation that I am correct on this, or that the form or procedure does exist so that I can file it and be done. I don't want to fire a client if I am wrong. Any comments appreciated.

You are correct!

The cut off date for receiving a tax return for 2007 credit was October 15th 2008. If you missed this deadline you had no option other than claiming the credit on the 2008 tax return. There are no exceptions that I know of!

Deb!

[JohnH]

Sometimes you just have to tell the client the system may not meet their definition of fair, but it is what it is and there's nothing to be done about it. If they are so irrational that they can't accept that simple fact, then maybe you're better off without them wasting your time.

[TaxmannEA]

Thanks for the confirmation. I guess that it's time for my "it's my way or the highway" speech.

[jainen]

>>my way or the highway<<

It really has nothing to do with your way. The Advance Refund was authorized by Congress in the Economic Stimulus Act of 2008, which specified that, "No refund or credit shall be made or allowed under this subsection after December 31, 2008." However, his NOL can be carried back for a refund of the tax liability that would have generated the Stimulus Payment (or equivalent amount in an earlier year).

[TaxmannEA]

Jainen, I think you misunderstood. My way = according to the Code. Client's way = "I need money. Get it any way you can."

Carryback won't work in this situation as there has been no taxable income for years. The rebate would have been generated by SS payments received by deceased spouse. The only taxes paid in the last 6 years have been small SE tax liabilities.

[jainen]

>>I need money. Get it any way you can<<

If quoting the actual law doesn't carry any weight, you can refer this person to the IRS website which still has all the announcements from last year.

Don't push the point too hard, though. Your client has been through a terrible time, and the matter is confusing. Maybe even you forgot, but there WAS a special form for late filers just claiming the stimulus payment -- a modified Form 1040A. Unfortunately (and please find a more tactful way to explain it) it now exists only in memory. Time has moved on.