Question:
I got a letter from the IRS telling me that they were holding my refund because I hadn't filed for 2001, 2002, and 2003, and they anticipate that I will owe for those years. They are holding the current refund so they can deduct any owed tax from my refund.

I filed the taxes for the years I'd missed, and to my surprise, I am due a significant refund for 2001, a decent refund for 2002 and some chump change for 2003.

The letter they sent me said that I have up to 3 years from the date the tax return was due in order to claim a refund. Does this really mean that they will only give me the refund for 2003's return? I'm really upset (with myself, of course).

Answer:
Yup. For the 2001 tax year you're pretty much hosed. you can't still get 02 because the returns were due 4/15/03 (which gave you until 4/17/06 sorry dude) unless you got an extension in which case you probably have until August or October. you can still get your 2003 refund though. One tactic you may be able to use (and I don't know if it will work at all) is to apply refund to the next year's tax on your returns and see if you can get it all back thorugh the 2003 return. I doubt it would work, but there's a slight chance it's possible. Best bet is to get a CPA and see if they can do anything about it.