The reality of life.

Sometimes, folks go through physical/mental heath events (whether acute or chronic) which causes their lives to really fall apart. Keeping up with bills, taking medications, and even taking care of basic daily needs becomes a challenge for those going through tough times.

Often, failing to file tax returns are among those items that go by the wayside. If the ill person owes money to the IRS, it is likely you would hear something from them in the form of collection letters. But what if a refund is due?

It is uncommon, if ever, for the IRS to notify a taxpayer that he/she should file a tax return to get a refund that is due to them. Unfortunately, the refund clock starts ticking when the the tax return is due---you only have 3 years from the due date of the tax return (or two years from the payment of tax) to request a refund. Otherwise, that refund is generally lost and the taxpayer is out the money he/she may desperately need.

Couple of ways to handle this:

1. If you know someone is in this bad situation, gently suggest that filing a tax return may be of benefit to him/her. If he/she cannot afford to pay for return preparation, there are IRS programs that might be able to help. 

2. If it is too late to file the earlier returns and there is significant refunds that were lost, contact a tax attorney who may be able to help overcome the 3 year limitation with a financial disability request. This is a very specific legal argument that often leads to a battle with the IRS. But with the right facts, it may be worth it to the senior who would otherwise be out the money.

If things fall apart--proactive effort is needed!