The IRS just announced that it has $917 million of funds that it is waiting to refund to an estimated 984,000 taxpayers. These 984,000 taxpayers have yet to file their 2009 tax return. In order to collect the money, these taxpayers will have to file a 2009 return with the IRS no later than April 15, 2013. The IRS estimates that over half of the refunds are more than $500.
One of the reasons that the IRS has this staggering amount of money to be refunded is that some taxpayers did not have enough income to require a tax return being filed, even though they may have had taxes withheld or made quarterly tax payments. When a tax return is not filed, the law allow provides the taxpayer with a three year period to claim a refund. After the three year window, the money becomes the property of the U.S. Treasury.
An interesting question is why these taxpayers have not filed their return since they are due a refund? Also, some low income earners would be entitled to additional tax benefits. In these difficult financial times, the IRS should not have this much money to be refunded.
The IRS announcement contains a break down by state of the number of individuals who have a potential return, the median potential refund for each taxpayer, and the total potential refunds.