The Internal Revenue Service said it has approximately $1.3 billion in unclaimed refunds waiting for people who did not file a federal income tax return for 2005.

To collect the money, they have to file a return for 2005 no later than Wednesday, April 15. “Especially in these tough economic times, people should not lose out on money that is rightfully theirs,” said IRS Commissioner Doug Shulman (pictured) in a statement. He recommended that people should check their records, especially if they had taxes withheld from their paychecks but were not required to file a tax return. “They may be leaving money on the table, including valuable tax credits that can mean even more money in their pockets,” he added.

The IRS estimates that half of those who could claim refunds for tax year 2005 would receive more than $581. Some individuals may not have filed because they had too little income to require filing a tax return even though they had taxes withheld from their wages or made quarterly estimated payments. 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 the property of the U.S. Treasury. For 2005 returns, the window closes on April 15, 2009.

The law requires that the return be properly addressed, postmarked and mailed by that date. There is no penalty assessed by the IRS for filing a late return qualifying for a refund. However, the checks of taxpayers who seek a 2005 refund will be held if they have not filed tax returns for 2006 or 2007. 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.

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access