IRS Wants to Give Back Over $2.5 Billion

It's that magical time of year when the IRS tries very hard to give lots of money back to lots of people. Specifically, IRS has more that $2.5 billion waiting to be reunited with nearly 2 million people who failed to file a 2000 income tax return. In order to collect the money, however, qualified persons must file a return with an IRS office no later than April 15, 2004.

The IRS estimates that half of those who could claim refunds would receive more than $529. 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.

"The clock is running if you want to get your refund," said IRS Commissioner Mark W. Everson. "People who aren’t required to file sometimes overlook that they had tax withheld. Don’t wait until it’s too late. We want all taxpayers to get the refund they’re due."

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 2000 returns, the window closes on April 15, 2004. 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 2000 refund that their checks will be held if they have not filed tax returns for 2001 or 2002. 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 2000. 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 their tax, those who file returns more than three years late would be able only to offset their tax. They would not be able to receive refunds if the credit exceeded their tax.

Generally, individuals qualified for the EITC in 2000 if they earned less than $31,152 and had more than one qualifying child living with them, less than $27,413 with one qualifying child, or less than $10,380 and had no qualifying child.

Current and prior year tax forms are available on IRS.gov or by calling 1-800-TAX-FORM (1-800-829-3676). Taxpayers who need help also can call the IRS help line at 1-800-829-1040.

[Source: Internal Revenue Service]