Tax Rebate Checks Languish Unclaimed At IRS

by Mike Godfrey, Tax-News.com, Washington

02 November 2001

According to a recent Internal Revenue Service announcement, almost 300,000 tax rebate checks, worth a total of $95 million, have been returned to their offices and are waiting to be reunited with their owners.

Reasons for failed delivery include name changes and changes of address, and although there have been checks returned from all 50 US states, a high proportion appear to have been returned from military bases and installations.

IRS Chief Charles Rossotti revealed recently that those who do not claim their tax refunds, which were a crucial measure in President Bush's flagship initiative to kick-start the US economy, by December 5 will have to wait until they file their 2001 income tax returns next year. 'All we need is a good address,' the IRS Commissioner said. 'As soon as we get the correct address, we'll send the check on its way.'

However, due to a 1950s era federal law, the IRS is unable to post the list of those whose rebate checks have been returned on its internet site, which may pose problems for some taxpayers wishing to ascertain their status. Some politicians believe that it is time to scrap the old-fashioned law, and believe that Congress should permit the IRS to put the names out. 'We must continue our efforts to make it easier to reunite the taxpayers with their long-lost tax refunds,' said Lloyd Doggett, a Republican member of the House Ways and Means Committee.

There was panic in the Internal Revenue Service recently when it was announced that in addition to matching strayed rebate checks with their owners, the IRS might have to mail out another batch of refunds in time for the Christmas shopping season. If approved by Congress, these checks will probably go to taxpayers whose incomes were too low to qualify for the first round.

However, Mr Rossotti warned in a letter to politicians that even if the checks could be sent before Christmas, thus hopefully boosting consumption over the festive season, the initiative could put the IRS far behind in processing ordinary rebates, which could cost the agency an estimated $58 million.

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