Time is running out for over one million people who haven’t claimed their refunds for the tax year 2007.
According to the Internal Revenue Service, refunds totaling $1.1 billion owed to people who did not file a federal income tax return in that year.
The law provides a three-year window of opportunity for most taxpayers to claim federal refunds from prior tax years – the 2007 return must be properly addressed, mailed and postmarked by the April 18th due date.
Unclaimed refunds past the three-year mark become property of the U.S. Treasury.
The IRS estimates that of the estimated 1.1 million people who are due a refund, approximately half of these potential refunds are $640 or more – not a paltry sum.
Those in this situation likely did not file their federal returns because their income was below the level which requires filing a federal return – even though they had taxes withheld from their paychecks, or made estimated quarterly payments through the tax year.
Taxpayers should not be afraid to file a late tax return if they are due a refund – the IRS doesn’t penalize for late returns if they who owe you money.
But the IRS will hold on to any refund due for 2007 for taxpayers who haven’t yet filed their 2008 and 2009 returns. Also, the refund may be held if the taxpayers owe any back-taxes, back child support, or other federal debts such as past-due student loans.
The IRS informs taxpayers that by failing to file a return, people stand to lose more than a refund of taxes withheld or paid during 2007. In addition, many low-and-moderate income workers may not have claimed the Earned Income Tax Credit (EITC).
The EITC helps individuals and families whose incomes are below certain thresholds, which in 2007 were $39,783 for those with two or more children, $35,241 for people with one child, and $14,590 for those with no children. For more information, visit the IRS website at www.irs.gov.
Source:
Internal Revenue Service
