In the wake of a devastating hurricane season, tax practitioners can help those clients affected by a federally declared disaster avoid a potential Lookback Trap that may arise due to IRS authorized filing deadline postponements. This trap may spring years later preventing taxpayers from receiving refunds when the Lookback Period fails to sync with refund claim filing deadlines.
The Lookback Trap is a failure of the three-year lookback period to include the postponement period as a result of a Federally declared disaster. This failure can result in missed opportunities to timely file a refund claim and receive the full amount available should the taxpayer need to amend an originally filed return.
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