ETS Tax Alert: Protective Claim for Potential Future Tax Refund

As you may know, the U.S. Supreme Court is considering a case regarding the Affordable Care Act that, depending on the outcome, could significantly affect on two types of income tax, the Additional Medicare Tax and the Net Investment Income Tax. Specifically, if the court determines that these taxes were unconstitutional, you may be eligible to amend your tax returns for the years 2016, 2017, and 2018 and claim refunds for any amount paid for these two taxes. We are not attorneys and are not suggesting that this is a likely or even possible outcome. We wanted to provide you with the option to take action now to ensure that, if the opportunity presents itself, you have the ability to take advantage.

Why is this urgent?

Tax refunds may be requested for previously filed tax years by filing an amended return for the given year. However, refund requests are only available within three years of the original due date of the return. The original due date of the 2016 tax return was April 15th, 2017, meaning that under normal circumstances, the deadline to file an amended return and claim a refund would have been April 15th, 2020. Due to the pandemic, however, all returns due April 15th, 2020 were extended to July 15th, 2020. This gives you until July 15th, 2020, to sign and mail the attached letter.

What does the letter do?

The letter informs the IRS that you are waiting on a current court case to settle before filing and initiates your refund claim now, leaving the three-year window open beyond the date that it would ordinarily close.This gives you the opportunity to amend your tax returns once the court case is determined (if the outcome dictates that we do so).

What should I do?

  1. Put your name, social security number (and those of your spouse if you filed a joint return for the year in question), address, and phone number on the top of the letter and sign at the bottom
  2. Mail the form to the address indicated in the below table based on where you live. We strongly recommend that, if it is an option, you send the letter via certified mail and keep a copy of the receipt showing the date that it was mailed.

What are the odds that I end up getting a tax refund related to this?

There is no way to know at this time, but the cost and energy to file this protective claim is minimal, so we are presenting it as an option.

This is due on July 15th. Why are we just now learning of it?

This matter just now came up. We are acting as quickly as possible as we did not want to hesitate and risk you potentially missing an opportunity for a future tax refund.

Need Help?

Let us know if you have questions or need help. We are always happy to assist you!

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