Time is running out for taxpayers to file a form to reclaim tax they overpaid if they sold life insurance stock. By Kevin McCormally, Chief Content Officer April 10, 2007 Editor's note: This is the transcript of Kiplinger Editorial Director Kevin McCormally's commentary on the April 9 broadcast of Nightly Business Report.There's an interesting case making its way through the courts that could result in millions of dollars of refunds for taxpayers who in recent years sold stock they received when a life insurance company converted from a mutual company to a stock company. This transformation goes by the endearing term "demutualization." The IRS says that when you get stock in such a deal, your tax basis is a big, fat zero. So, when you sell, every dime is taxed. Some taxpayers say that's baloney. Some say the basis of the stock is the value when they got it; others have other methods. But the key is this: If the stock has a basis, you owe less tax when you sell. Advertisement Last year, the IRS asked a federal court to reject that reasoning. But the court refused to throw out the case. That gives the taxpayers hope, but so far the court hasn't decided if they have a basis and, if so, what it is. As the legal wheels turn, an important deadline is coming up for anyone who sold life insurance stock in 2003. April 17 is the last day they can file an amended return to reclaim tax they overpaid on their 2003 return by using the IRS's zero-basis method. If you're in this boat, you need to file what's called a "protective refund claim" by April 17. Basically, that's an amended return asking for your money back but telling the IRS to hold off until the court decides the case. The point is to prevent the statute of limitations from slamming the door on your chance for a refund. Ask your tax adviser for help, or shoot me an e-mail from the NBR Web site, and I'll reply with more information.