As of now IRC-1341 'Claim of Right' has to exceed $3,000 in a single tax year to be utilized, but can further clarification be given on the following question?
As a disabled person I work a part time job but don't make that much money at $3,000 - $6,000 per year. Per my LTD Contract, I have to repay 50% of any salary I make, and pay taxes on in the current year, in the following tax year after taxes are complete and a true business income known. Thus, for the last 2 years I will overpay taxes on 1/2 of my business income, but will have no recourse in the individual tax year because it's less than $3,000. I think IRC-1341 used to be stack-able for up to 3 previous tax years on a single tax return because after 3 years IRC-1341 would no longer apply. Thus the following questions.
Question(1): If 2 consecutive tax years have a total number greater than $3,000, i.e. 2018 is $1,700 and 2019 is $2,000 = $3,700, can IRC-1341 be claimed for the 2 tax years on a single future return.
What's a joke about this to me is the LTD Life Insurance Company withheld a months LTD Payment in 2019 for the 2018 overpaid income owed back by me, but then reported to the IRS that I actually received the non-payment. LTD Insurance in a letter said I could take it as a Credit in 2019, but how as the IRS says IRC-1341 is the preferred method? I can't, but I have to also pay taxes on the non-payment that was not deposited in my bank account. How is a non-payment income?
Question (2) - If not IRC-1341, can I take what I have to pay back to LTD Insurance as a Business Loss as I know each year I work while on LTD that I owe 1/2 my business income back to the Insurance Company?
Obviously Congress knows not what they do, and the IRS just doesn't care, because I've been getting screwed by the IRS along these same lines on issues surrounding IRC-1341 since I've become disabled in 2007. After this tax year, I'm through trying to work as the negatives far outweigh the positives at tax time.
