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The IRS has $1.4 billion in old tax refunds—here's how to tell if some of it's yours
CNBC
Thu, 14 Mar 2019 19:19

The IRS has $1.4 billion in old tax refunds—here's how to tell if some of it's yours

CNBC
Thu, 14 Mar 2019 19:19

The IRS has $1.4 billion in old tax refunds—here's how to tell if some of it's yours


The Internal Revenue Service has roughly $1.4 billion in unclaimed federal income tax refunds that about a million Americans may have overlooked. And time is running out to claim that money.
So how can you tell if some of those funds are yours? If you didnt file a 2015 federal income tax return, the IRS said in a recent report, you may be due a check.

"Were trying to connect over a million people with their share of $1.4 billion in potentially unclaimed refunds for 2015," said IRS Commissioner Charles Rettig. "Students, part-time workers and many others may have overlooked filing for 2015."
This time last year, there was around $1.1 billion in unclaimed refunds.
In cases where a tax return was not filed, most people are allowed a three-year window to claim their refund, the IRS explains. And while theres no penalty for filing a late return if youre owed money, you do have to file by April 15, 2019 in most states to collect it.
Taxpayers in Maine and Massachusetts have until April 17, 2019.
If you havent filed a 2015 return and meet all the criteria to receive a refund, the IRS explains, "the law requires taxpayers to properly address, mail and ensure the tax return is postmarked by that date." Current and prior tax forms and instructions are available on the IRSs website.

Filers who are missing the required forms "should request copies from their employer, bank or other payer," the IRS says.

Those who are unable to get missing forms from their employer or another payer "can order a free wage and income transcript at IRS.gov" or request a wage and income transcript, which will contain relevant information from previous returns.
If you dont file a return within three years, the money becomes property of the U.S. Treasury. Also keep in mind that your 2015 refund could be withheld if you havent filed tax returns for 2016 and 2017.

And if you owe the IRS or a state tax agency, have unpaid child support or have past-due federal debts, such as student loans, your refund could be applied to that instead.

"In the meantime, the IRS will send several reminders to file," according to financial-software company Intuits FAQ page. If you ignore them, "the IRS may file a substitute return on your behalf."
However, Intuit warns that "while this may sound like a clever way to hand off your tax-prep chores to the government, keep in mind that government-prepared returns may not grant every deduction or credit youre entitled to."

For example, "many low- and moderate-income workers may be eligible for the Earned Income Tax Credit," the IRS notes. For 2015, that credit was worth more than $6,200.

If you havent filed a 2015 return and owe taxes (as opposed to being owed a refund), you could be subject to the failure-to-file penalty, which could cost five percent of your unpaid tax bill each month it goes unpaid after the April deadline, and potentially a maximum of 25 percent of what you owe.

Eventually, non-filers who owe taxes will be subject to additional penalties and in some cases, even criminal prosecution, says Intuit. "Delinquent taxpayers who owe more than $25,000 will eventually receive a visit from an IRS representative to collect payment."

The deadline for filing (and for filing an extension) this year is April 15. Experts suggest filing early: Due to changes in the tax law, some taxpayers could see lower refunds this year and about 30 million could actually owe money to the IRS.

This is an updated version of a previously published story .

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