Bear with me as this might get complicated and long... In short, I amended my past 3 years returns and combined was expecting over $7000 in refunds. Understandably but surprisingly, I received notice that a large portion of this refund was being applied to past unpaid taxes on my wife's behalf prior to our marriage. She has poor record keeping and doesn't exactly remember when or how much was owed in back and unfiled taxes. She was laid off in June of 2008 and unemployed ever since. She "thinks" the last time she filed was for year 2007 which resulted in money owed, but not paid (which doesn't seem right either because she was employed that year with W2 withholdings and a child dependent). She received unemployment for 2 years after being laid off (and I'm positive she didn't file returns for those years and anything after, until adding her on my amendments listed earlier). So, the IRS withheld $X from my expected refund stating it was applied to her 2007 tax due but when a check finally was received it was roughly $1800 LESS than expected, even after deducting the $X amount they stated would be withheld. I am only assuming that is $1800 additional withholdings is from the years she received unemployment and did NOT file returns for those years this was "estimated" taxes due on it.
SO... Is there any way to go back and have her actually file taxes for those unfiled years (2008&2009), incorporating child and other qualifying credits, reducing that "estimated" $1800 that was already withheld to an actual $500 (or whatever it may be after proper deductions)?
BUT... this is where the "fine line" question in my title comes into play. I know there is a statute of limitations of 3 years on being able to receive a refund, and 10 years for collecting a payment. Lets say she files returns for 08 and 09 (years on unemployment) today, and that estimated amount due drops to only $500 after proper deductions. Since $1800 of it was already paid using withholdings from a recent refund, is the statute of limitations passed to receive a refund of the difference ($500 due - $1800 paid = $1200 refund). OR would the statute start the date the estimated $1800 was paid (about only a week ago)?
If I lost anybody in my explanation, to sum up in simpler terms, If I recently paid an "estimated" tax due requested by the IRS for tax years from 7 & 8 years ago that was unfiled, can I now officially file returns for those years and now receive a refund for the difference of the estimated already paid vs. actual due (bearing in mind that the payment was made only a week ago)?
P.S.I know most responses will state for me to "ask my accountant" but unfortunately, being a family friend, he feels he is "too busy" this time of year to help out, in addition, he was the cause of having to amend my past 3 years taxes in the first place. Honest advice from a tax pro here would be appreciated. Thank you
