The Tax Attic with Jerry Coon

April 15 around the corner

It’s Master’s week. For a large number of golfers, this tournament, the first major of the year, gets the ball rolling for golf. Everything is perfect at the Masters. Augusta National Golf Club is among the most beautiful golf courses on this Earth. The flowers are perfect; there are always birds singing in the background. Only the best golfers in the world are invited to play in the most prestigious tournament in the world. Win the Masters one time, like Zach Johnson, and your reputation is made. Only a handful of players have won it more than once.

Jerry Coon, Enrolled Agent

The Masters was first held in 1934. The First Annual Invitation Tournament as it was called back then was not won by the world’s best golfer, Bobby Jones. A very good player by the name of Horton Smith beat Craig Wood by sinking a 20-foot birdie putt on the 17th hole. Bobby Jones and Alister MacKenzie did design the course, but Bobby had retired from competitive golf in 1930.

We don’t seem to have heroes like Bobby Jones anymore. Like all of us, he had issues. By all accounts, he had a terrible temper. In 1921, in the third round of the British Open, he stormed off the course, thereby disqualifying himself, because he was playing badly. If I stormed off the course every time I was playing badly, I would never get in a full round of golf. However, from that point on, Bobby Jones began to control his temper and began to win tournament after tournament. The culmination of his winning came in 1930 when he won the Grand Slam of Golf.

At the time, the Grand Slam was made up of the British Amateur, the U.S. Open, the British Open, and the U.S. Amateur. Now the Grand Slam is made up of the Masters, U.S. Open, British Open, and the PGA Championship. Maybe it’s tougher now, and with all due respect to Tiger Woods, Bobby Jones was still the best golfer ever.

Even though it’s near the end of the tax season, I think I can find a few minutes here and there to catch some golf this weekend.

As it is nearing the end of the tax season, let’s take a moment to go over some items that happen on April 15. First, traditional and Roth individual retirement account contributions must be made by April 15. Contributions for the 2009 tax year can only be made until April 15. If you wait until April16 to make the contribution, it will be a 2010 year contribution.

Second, April 15 is the last day to amend a 2006 tax return to claim a refund. The statute of limitations on the federal return runs three years from the due date of the return or two years from the filing of the return, whichever date is later. The due date for 2006 tax returns was April 15, 2007. Three years running puts us at April 15, 2010. Presuming the taxpayer filed the return by the due date, the last chance to amend the return to get a potential refund would be April 15, 2010. If the taxpayer filed the return after April 15, 2007, there is a potentially shorter time frame to amend.

For example, the return is not filed until December 1, 2009. The statute of limitations for that return would be two years or December 1, 2011.

The statute of limitations goes both ways, of course. The upside is the taxpayer is allowed to amend a return within that time frame to claim a refund. The downside is that the Internal Revenue Service can also choose to audit any return it chooses to within that time frame to make sure the taxpayer is entitled to refund he has claimed. So April 15 is a big day both ways.

We can no longer go back and amend the 2006 tax returns, but the IRS can no longer go back and audit the 2006 tax returns. Some might say that is good trade-off.

By the way, the state of Michigan maintains a four-year statute of limitations. The 2006 returns can be amended or audited through April 15, 2011. It’s the 2005 year tax returns that expire this year. Any way you want to look at it, April 15 is the last day of this tax season, and that makes it a big day in my book. This is Jerry Coon signing off.

Jerry Coon is an Enrolled Agent. Action Tax Service is located on Northland Drive in Rockford. Contact Jerry at Action’s website at www.actiontaxservice.com.

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