The IRS holds huge amounts of funds owed to various taxpayers, many of which are not aware that they are indeed, owed funds! According to the IRS website, the tax authority has millions of dollars that it owes taxpayers that they are ready to dish out. Unfortunately, if such funds are not claimed within three years, they become the property of the U.S. treasury. If you suspect that you are owed funds from the IRS, you need to check this out in good time before your money gets permanently bequeathed to the treasury. According to the IRS, there are 4 groups of people who account for most of those owed:
1. Withheld Taxes for those below the Tax Threshold
The first category of people who could be owed by the IRS and be unaware of it are individuals who earn wages with employer-withheld taxes. If the income of such individuals is below the threshold of taxation, then they are not required to file a tax return – and many of them do not file one. However, any withheld taxes are moneys owed to these individuals, as their income levels exempt them from paying income taxes. Such individuals will need to file a return to make a claim on these withheld taxes. They may file a tax return for up to 3 years after such taxes are withheld. No penalties or interests are charged to people who are owed refunds by the IRS and therefore, this is a simple and straightforward process.
2. Unpaid Earned Income Tax Credit
Some individuals may also have earned wages below the taxable threshold and may not have had their employers withhold taxes. In this case, such taxpayers need not file a return. However, they may have qualified to claim the Earned Income Tax Credit (EITC). This is a tax credit given to taxpayers who earn below a given cap. This credit is refundable and therefore, individuals who may have not needed to file a return would still qualify for the credit. In such a case, the individual will need to file a return within three years of EITC qualification to get a refund check. To know if you qualified for EITC, you can use an EITC service available at the IRS website.
3. Taxpayer Who Worked Part of the Year
Another category of people who would be owed cash by the IRS are taxpayers who were employed for a short period of time in the year and taxes were withheld from their wages. However, taxes are calculated on an annual bases and therefore, the taxes withheld from the income may have been much more than what was supposed to have been paid. You therefore may be owed some refunds from overpaid taxes that you paid when employed.
4. Refunds not Received
Finally, the IRS also receives many refund checks that have been returned because the addresses they were delivered to were incorrect. Therefore, if you were expecting a refund check for any given year and did not receive the funds, you may check with the IRS for such missing refunds. The IRS website has a section that enables taxpayers to claim for missing refund checks. You will be prompted to indicate your new address and any returned check within the last year will be mailed to the address indicated. You can also call the toll free IRS number to inquire about missing refund checks.
To avoid having refund checks being routed to the wrong address, ensure that you provide the IRS with your new address every time you relocate. You can do this by filing IRS Form 8822, “Change of Address Form”.