Considerations in Tax Refund Litigation
Tax attorneys Mary McNulty and Lee Meyercord co‑authored an article for the Tax Executives Institute's (TEI) Tax Executive journal examining whether refund litigation can help taxpayers resolve delayed or "stuck" refunds amid significant disruptions at the IRS. They outline the key challenges taxpayers are facing, including processing delays, statute of limitations issues and inconsistent IRS communications, as well as explain the importance of filing timely and properly drafted refund claims. The authors also discuss the variance doctrine, risks associated with informal claims and traps related to the statute of limitations when filing suit. In addition, they highlight strategic considerations such as potential offsets, choice of forum, and the cost and publicity implications of litigation. Ms. McNulty and Ms. Meyercord emphasize proactive planning, careful claim preparation and ongoing review of evolving case law to best position taxpayers for successful refund recovery.