Time Running Out For Taxpayers To Claim $2bn In Tax Refunds

by Mike Godfrey, Tax-News.com, Washington

23 February 2006

Unclaimed refunds totaling more than $2 billion are awaiting about 1.7 million people who failed to file a federal income tax return for 2002, according to the Internal Revenue Service, which is urging affected taxpayers to file a 2002 tax return no later than April 17, 2006 to remain eligable to collect their refund.

The IRS estimates that half of those who could claim refunds would receive more than $570.

In some cases, individuals had taxes withheld from their wages, or made payments against their taxes out of self-employed earnings, but had too little income to require filing a tax return.

Some taxpayers may also be eligible for the refundable Earned Income Tax Credit, the IRS stated.

“We want people to get the refunds they're entitled to,” commented IRS Commissioner Mark W. Everson.

“We urge taxpayers to double-check their records before the April 17th deadline. Taxpayers can’t get a refund if they don’t file a tax return," he added.

In cases where a return was not filed, the law provides most taxpayers with 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 US Treasury.

The IRS also warned that taxpayers seeking a 2002 refund will have their checks held if they have not filed tax returns for 2003 or 2004. In addition, the refund will be applied to any amounts still owed to the IRS, and may be used to satisfy unpaid child support or past due federal debts such as student loans.

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