The IRS' definition of financial disability is as follows:
Periods of financial disability. If you are an individual (not a corporation or other taxpaying entity), the period of limitations on credits and refunds can be suspended during periods when you cannot manage your financial affairs because of physical or mental impairment that is medically determinable and either:
• Has lasted or can be expected to last continuously for at least 12 months, or
• Can be expected to result in death.
The period for filing a claim for refund will not be suspended for any time that someone else, such as your spouse or guardian, was authorized to act for you in financial matters.
The following is the proof the IRS requires:
To claim financial disability, you generally must submit the following statements with your claim for credit or refund:
1. A written statement signed by a physician, qualified to make the determination, that sets forth:
a. The name and a description of your physical or mental impairment,
b. The physician's medical opinion that your physical or mental impairment prevented you from managing your financial affairs,
c. The physician's medical opinion that your physical or mental impairment was or can be expected to result in death, or that it has lasted (or can be expected to last) for a continuous period of not less than 12 months, and
d. To the best of the physician's knowledge, the specific time period during which you were prevented by such physical or mental impairment from managing your financial affairs, and
2. A written statement by the person signing the claim for credit or refund that no person, including your spouse, was authorized to act on your behalf in financial matters during the period described in paragraph (1)(d) of the physician's statement. Alternatively, if a person was authorized to act on your behalf in financial matters during any part of the period described in that paragraph, the beginning and ending dates of the period of time the person was so authorized.
You may want to seek the advice of a tax attorney if you believe you qualify.
firstname.lastname@example.org Office number: (860) 255-7423 Website: www.cttaxhelp.com. Our reply to your question has not created an attorney-client relationship. It should not be considered legal advice. You should contact an Attorney who can give you legal advice after acquainting themselves with the specifics of your case.
My colleague is correct here. And financial disability determinations are challenging ones. If you're able, it will be very helpful to get the assistance of a tax attorney.
Evan A. Nielsen is licensed to practice law in California and handles federal tax matters throughout the U.S. The information provided here is for educational purposes only and is not intended as legal advice for a particular matter. This response does not create any attorney-client relationship with the author. For specific advice about your particular situation, please consult an attorney.