For all the complaining about taxes, it is rather amazing that taxpayers leave so much money on the table each year. The IRS recently announced that 2.2 billion dollars in refunds are about to expire unclaimed.
April 17, 2007 represents Christmas for the federal government. Why? If 1.8 million Americans don’t wake up, the federal government will get a gift of 2.2 billion dollars. How would you like to find that under the tree!
The 2.2 billion dollars is a 2003 issue. Specifically, taxpayers failed to claim the money in the form of tax refunds for the 2003 tax filing period. How many taxpayers? About 1.8 million. This equates to an average refund of $1,222. Obviously, some are smaller and others bigger, but it is a nice chunk of change.
Given the amount of the tax refund pool, one might wonder how so many people could have failed to claim their refunds. The answer can be found in a couple of areas.
1. People who failed to file returns because they didn’t earn a lot.
2. People who switched jobs and didn’t calculate the taxes paid by both employers.
3. People who moved and didn’t tell the IRS. Tax refunds are not forwarded in the mail.
4. People who can claim the earned income tax credit.
5. Self-employed people who overpaid certain quarterly taxes.
So, why is there a deadline to file for the refunds? Tax law is such that you have three years to look back in time on tax issues. As a result, the April 17th deadline is three years from April 15th 2004, the date you should have filed a tax return for your 2003 taxes. The extra two days have to do with the fact the 15th is a Saturday this year.
If you complain about your taxes, you should go back and check your 2003 return. If you are due a refund and let it expire, you have nobody to blame but yourself. Just think, you could apply it to the amount you owe this year!
Richard A. Chapo is with BusinessTaxRecovery.com - providing information on
tax articles.
