Claiming a refund from the IRS can be accomplished by many means. If you have a change in your return, you can file IRS Form 1040X to amend your 1040, 1040A, or other 1040 form. Most of these “type X” forms are filled out when the taxpayer has made a mistake or has to alter their returns. When the IRS is the one who makes the mistake, the taxpayer must fill out IRS Form 843 to claim a refund. The form is also used to seek abatement from a penalty imposed by the IRS after they have committed an error.
One example of IRS error that would enable a taxpayer to file for penalty abatement could result from an individual sending a request in writing to the IRS for advice. If following this advice caused a person to incur a penalty of some sort, the IRS official who responded to their request is responsible for the erroneous advice sent which, in turn, makes the IRS liable. Another instance involves what the IRS calls “grossly unfair treatment”. Basically, when circumstances around a tax penalty case involve situations that are out of an individual’s control, it may not be reasonable for the IRS to charge fees or fines. Doing so would punish a taxpayer for something that for which they are not entirely responsible.
In order to claim a refund, an individual must show that an excess of tax was kept by the IRS and that there is no means to recover it from another entity which had withheld the tax. For example, if an employer withheld an excessive amount of social security tax, but will not compensate for the over-collection, the taxpayer may then file IRS Form 843 to request a refund. One must be careful when doing so, however. Claiming an amount over what is due comes with a 20% penalty on the amount gone over. One should seek the advice of a qualified tax expert for help in filling out these and other forms.