Unclaimed refunds totaling more than $1.1 billion (with a ‘B’) are awaiting nearly 1.1 million people who did not file a federal income tax return for 2007!
But to collect the money, a person must file a tax return for 2007 with the IRS no later than Monday, April 18, 2011. The IRS estimates that the median unclaimed refund for tax-year 2007 is $640 or more.
For example, in my home state of New York, unclaimed IRS refunds total $78,405,000 which is a substantial amount of money that is not coming into the New York economy. More importantly, individuals and families who are due that money are not claiming it.
Some people may not have filed because they had too little income to require filing a tax return. Others may have put it off even though they had taxes withheld from their wages or made quarterly estimated payments. When a return is not filed, the law gives most people a three-year window of opportunity for claiming a refund. If no return is filed to claim the refund within three years, the money becomes property of the U.S. Treasury.
The IRS reminds taxpayers seeking a 2007 refund that their check will be held if they have not filed tax returns for 2008 and 2009. In addition, the refund will be applied to any amounts still owed to the IRS, and may be used to offset unpaid child support or past due federal debts such as student loans.
By failing to file a return, people stand to lose more than a refund of taxes withheld or paid during 2007. In addition, many low- and moderate-income workers may not have claimed the Earned Income Tax Credit. The EITC helps individuals and families whose incomes are below certain thresholds, which in 2007 was $39,783 for those with two or more children, $35,241 for people with one child, and $14,590 for those with no children. For more information, visit the EITC Home Page.
Current and prior year tax forms and instructions are available on the IRS Forms and Publications web page or by calling toll-free 1-800-TAX-FORM (1-800-829-3676). Taxpayers who are missing Forms W-2, 1098, 1099 or 5498 for 2007, 2008 or 2009 should request copies from their employer, bank or other payer.