IRS Has $2.2B in Unclaimed '03 Refunds; Deadline Nears
March 7, 2007 (SmartPros) Unclaimed refunds totaling more than $2.2 billion are awaiting about 1.8 million people who failed to file a federal income tax return for 2003, the Internal Revenue Service said Tuesday. However, in order to collect the money, a return for 2003 must be filed with an IRS office no later than Tuesday, April 17, 2007.
The IRS estimates that half of those who could claim refunds would receive more than $611. 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.
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 U.S. Treasury. For 2003 returns, the window closes on April 17, 2007. 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.
The IRS reminds taxpayers seeking a 2003 refund that their checks will be held if they have not filed tax returns for 2004 or 2005. 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.
By failing to file a return, individuals stand to lose more than refunds of taxes withheld or paid during 2003. Many low-income workers may not have claimed the Earned Income Tax Credit (EITC). Although eligible taxpayers may get a refund when their EITC is more than what they owe in tax, those who file returns more than three years late would be able only to apply it toward the taxes they owe (if any). They would not be able to receive a refund if the credit exceeded their tax.
Generally, unmarried individuals qualified for the EITC if in 2003 they earned less than $33,692 and had more than one qualifying child living with them, earned less than $29,666 with one qualifying child, or earned less than $11,230 and had no qualifying child. Limits are slightly higher for married individuals filing jointly.2007 SmartPros Ltd. All rights reserved.