%POST_TITLE% Thumbnail

October 30, 2018

Stake Your Claim...To Your Rights Under the Strickland Decision

Taxes Veterans Benefits

During the Gold Rush, miners would protect their claim to gold mining or panning by staking a claim...literally with a stake. If you have a complicated VA Disability Claim or are waiting on appeal you may want to stake your claim too.

As written about here, you have the right to amend a tax return to account for VA offset that should have been taken from your retired military pay while your claim was being adjudicated. This right was granted as a result of the Strickland Decision and was codified in IRR 78-161.

Under the normal rules you have 3 years from the time you filed your return or two years from the time you paid the tax, whichever is later, to file a claim for a refund. Under a special provision in the tax code pertaining to VA claims, that time can be stretched to four years under rules described here. The problem is that occasionally, the VA takes longer than that amount of time and you may not be able to file an amended return. Unless...

You file a protective claim. You can file a protective claim if:

Your right to a refund is contingent on future events and may not be determinable until after the time for filing a claim for refund expires.

The protective claim preserves your right to claim a refund when the contingency is resolved.

So how do you file a protective claim? A protective claim must:

Be in writing and signed
Include your name, address, social security number and other contact information
Identify and describe the contingencies affecting the claim
Clearly alert the IRS to the essential nature of the claim, and
Identify the specific year(s) for which a refund is sought

Mail the protective claim for refund to the address listed in the instructions for Form 1040X, under Where to File.

You have the right to do this. Make sure you or your financial advisor are aware of this military tax issue.

If you found this article interesting, you might like these blog posts:

The Strickland Decision Part iii

SBP and DIC

Military Tax Break: Sale of Primary Residence

Disclaimer
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by C.L. Sheldon & Company, LLC ), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. C.L. Sheldon & Company, LLC does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to C.L. Sheldon & Company, LLC website or incorporated herein, and C.L. Sheldon & Company, LLC takes no responsibility therefore. All such information is provided solely for convenience, educational, and informational purposes only and all users thereof should be guided accordingly. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from C.L. Sheldon & Company, LLC . To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. C.L. Sheldon & Company, LLC is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the C.L. Sheldon & Company, LLC ’s current written disclosure statement discussing our advisory services and fees is available for review upon request. DISCLAIMER OF TAX ADVICE: Any discussion contained herein cannot be considered to be tax advice. Actual tax advice would require a detailed and careful analysis of the facts and applicable law, which we expect would be time consuming and costly. We have not made and have not been asked to make that type of analysis in connection with any advice given in this blog post. As a result, we are required to advise you that any Federal tax advice rendered in this blog is not intended or written to be used and cannot be used for the purpose of avoiding penalties that may be imposed by the IRS. In the event you would like us to perform the type of analysis that is necessary for us to provide an opinion, that does not require the above disclaimer, as always, please feel free to contact us.