IRS Refund Statute Expiration Date and Penalty Relief

Did you know that the IRS has something called the Refund Statute Expiration Date (RSED)? 

The IRS is prohibited from issuing a refund of abated penalties and interest on a full paid account if the RSED has passed.

The Internal Revenue Manual section 25.6.1.10.1.1(6) states:

a claim for credit or refund must be filed within 3 years from the time the return was filed or 2 years from the time the tax was paid, whichever is later.