The LTR 86C disallows a claim you submitted. This could be a claim for refund on an amended return, a claim for a specific credit, or another type of claim for credit or payment. The letter explains why the claim was denied and informs you of your rights to dispute the decision.
Common Denial Reasons
Claims are commonly denied because the claim was filed after the statute of limitations (generally 3 years from filing or 2 years from payment), the documentation supporting the claim was insufficient, the IRS disagrees with the legal basis for the claim, or the claim involves a position the IRS considers incorrect.
Your Options
You can request a conference with the IRS to discuss the denial. You can file a protest to the IRS Office of Appeals if the amount exceeds the threshold for informal resolution. And you can file a refund suit in federal district court or the Court of Federal Claims within 2 years of the disallowance date.
The Appeals route is usually the most efficient first step. Appeals Officers have settlement authority and can evaluate the hazards of litigation on both sides. Many claim disallowances are resolved favorably at Appeals.
Calendar Your Deadlines
The 2-year deadline for filing a refund suit starts from the date on the LTR 86C. Mark it on your calendar immediately. Even if you pursue Appeals first, the 2-year deadline runs concurrently. Don't let the refund suit deadline expire while waiting for Appeals.
If your claim was disallowed, call us at (813) 229-7100.