The LTR 105C is a formal disallowance of a claim for refund or credit. If you filed an amended return (Form 1040-X) or a formal claim for refund and the IRS denied it, the LTR 105C is their official notice. This letter starts important deadlines for preserving your right to challenge the denial.
Your Options After Disallowance
You can request Appeals consideration by filing a written protest within 30 days. Appeals can settle refund claims using the same hazards-of-litigation analysis they use for deficiency cases. This is often the most efficient path to resolution.
You can file a refund suit in federal district court or the Court of Federal Claims within 2 years of the disallowance date. A refund suit is more formal and expensive than Appeals, but it gives you access to a jury trial (in district court) and binding judicial precedent.
If you miss the 2-year deadline for filing suit, the disallowance is final. You cannot recover the claimed refund.
Why Claims Get Disallowed
Common reasons include insufficient documentation supporting the claim, the claim was filed beyond the statute of limitations (generally 3 years from filing or 2 years from payment), the IRS disagrees with your legal position on the underlying tax issue, or the claim involves a position the IRS has specifically identified as incorrect.
Preserve Your Deadlines
The 30-day Appeals deadline and the 2-year refund suit deadline are both critical. Calendar them immediately when you receive the LTR 105C. The Appeals deadline gives you the cheaper option. The refund suit deadline is your backstop.
If your refund claim was disallowed, call us at (813) 229-7100. We evaluate refund claims and know when to appeal and when to litigate.