The IRS will allow the recovery of IR amounts paid in excess in recent years in situations where taxpayers lost tax benefits following medical reassessments that reduced the degree of disability to less than 60%, which led to the withdrawal of tax advantages now considered undue. The measure covers cancer patients and people with disabilities, according to the Federal Revenue Service.
According to news reported by , the decision comes in the wake of an understanding by the Supreme Administrative Court, which contradicted the practice followed by the Tax Authority since 2019.
Refunds depend on taxpayers’ initiative
At issue is the way the tax authorities interpreted the loss of the degree of incapacity. Until now, whenever a medical reassessment reduced the percentage allocated to a taxpayer, he or she automatically stopped benefiting from the associated tax incentives, even if the health condition remained. This reading ended up being challenged and considered illegal, now paving the way for the replacement of the overcharged amounts.
In practice, affected taxpayers can recover amounts for several years, since 2019, as long as they proceed with the request. However, the process will not be automatic. The correction of settlements depends on the initiative of the citizens themselves, who will have to submit replacement declarations through the Finance Portal.
This detail is crucial. Without this update, the Federal Revenue Service will not return the amounts, even in cases where there is a right to a refund. The procedure involves reviewing Income Tax returns for the years in question, taking into account the tax framework now validated by the courts.
Decision corrects practice considered illegal
The decision is expected to have a significant impact on a wide range of taxpayers, especially those who have had their level of disability reviewed after periodic treatments or clinical reassessments. In many cases, the administrative change did not reflect an effective improvement in health conditions, but resulted from technical criteria applied by medical boards.
In addition to the financial component, the topic also raises questions about the predictability of the tax system and the connection between medical assessments and the tax framework. The now authorized replacement aims to correct a practice that has been in force for several years and that has affected taxpayers in a particularly vulnerable situation.
According to the same source, the deadline and specific procedures for submitting substitute declarations follow the general rules of Income Tax, which is why interested parties should check the possibility of revision on a case-by-case basis. The Federal Revenue Service did not come up with an automatic compensation mechanism, maintaining responsibility for the process on the taxpayers’ side.
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