A guideline that affected taxpayers with a downwardly reassessed disability was reviewed by the Tax Authorities, opening up the possibility of correcting some tax situations, in a change advanced by . The decision could impact people who lost IRS tax benefits after a new medical evaluation reduced the previously recognized degree of disability.
In practice, the change does not mean an automatic tax refund. The new understanding does allow certain taxpayers to request the regularization of their tax situation, as long as they are covered by the stipulated conditions and are still within the legal deadlines.
What is at stake in the change in the Federal Revenue Service
The change comes after AT reviewed the way it had been applying the principle of most favorable assessment. This principle may be relevant when a taxpayer had a degree of disability equal to or greater than 60% and, in a first review or reassessment, started to have a lower percentage, but referring to the same clinical pathology.
According to the letter circulated by the Federal Revenue Service, in cases where this first review or reevaluation took place by December 31, 2023, the taxpayer may maintain the right to the tax regime associated with the fiscally relevant deficiency until a new evaluation, as long as the other requirements are met.
This point is important because, until now, some taxpayers ended up losing tax benefits after reducing the degree of disability, even when the clinical situation continued to be linked to the same disease. The new guidance changes this reading and now allows the application of the most favorable regime in certain circumstances.
Not all taxpayers are covered
The decision does not apply equally to all cases. AT’s own guidance distinguishes situations depending on the date of reassessment, the degree of disability certified and the existence of new subsequent medical assessments.
When there is a second review or reassessment and this again confirms a grade below 60%, the principle of the most favorable assessment ceases to take effect. Even so, in the year of this second revaluation, the taxpayer maintains the tax regime from which he was benefiting, according to the explanation contained in the official document.
For revaluations occurring from 2024 onwards, the rule becomes different. In the year of review, the regime applicable to those with disability equal to or greater than 60% remains unchanged. In the following year, if the new certificate indicates disability equal to or greater than 20%, a billing deduction may be applied for four years, as long as the legal requirements are met. If the degree is less than 20%, the IRS no longer applies the disability tax regime.
How can an adjustment be requested?
Regularization depends on the taxpayer’s initiative. In situations where there has been a loss of tax rights or benefits due to a disability of less than 60% having been certified, the AT allows the submission of a replacement IRS declaration within two years from the end of the legal period for submitting the declaration.
Another possibility is a graceful complaint, within the same period. The document also provides for the request for review of IRS assessment tax acts, within four years after assessment, or at any time if the tax has not yet been paid, when an error attributable to the services is involved.
This means that those who were affected must look at the history of their statements, the date of reassessments and the elements contained in the medical certificate of multipurpose disability. Only after this analysis will it be possible to see if there is room to request an Income Tax correction.
The impact can reach reimbursement
The change may translate into a difference in the tax payable or the amount received, but only in cases where the specific situation falls within the rules now clarified. Therefore, the expression “recover tax” should not be read as a guaranteed refund for all taxpayers who had a low medical reassessment.
Still, for those who have lost tax benefits in recent years, the review of the Revenue’s understanding opens up a path that could have been closed until now. The decisive step is to confirm whether there has been a loss of rights, whether the previous disability was equal to or greater than 60%, whether the new assessment concerns the same clinical pathology and whether the request can still be submitted within the expected deadlines.
Also read:
