The Internal Revenue Service said it has approximately $1.2 billion in unclaimed refunds waiting for 1.3 million people who did not file federal income tax returns for 2004, but they need to file by April 15, 2008, to claim the money.
The IRS estimates that half of those who could claim refunds for tax year 2004 would receive more than $552. 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 of them may also be eligible for the refundable Earned Income Tax Credit.
The law provides most taxpayers with a three-year window of opportunity for claiming a refund. If no return is filed within three years, the money becomes the property of the U.S. Treasury. The IRS does not assess a penalty for filing a late return that qualifies for a refund.
However, the IRS warned that taxpayers who want a refund for 2004 will have their checks held if they have not yet filed tax returns for 2005 and 2006. And if they want to receive an economic stimulus payment or tax rebate this year, they will need to file a return for 2007 as well. The refund may 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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