In the case of bad debts and worthless securities, the statute of limitations on claims for refund is seven years.

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According to the IRS, the statute of limitations on claims for refund for bad debts and worthless securities is seven years. This means that taxpayers generally have seven years from the date that the tax return was due or filed (whichever is later) to claim a refund for bad debts or worthless securities that were previously deducted on their tax return.

In the Case of Bad Debts and Worthless Securities, the Statute