IRS has re­funds worth $1.1 bil­lion wait­ing to be claimed, but the clock is tick­ing

The Washington Post - - ECONOMY & BUSINESS -

This is the giv­ing sea­son.

The IRS took your money, and now it’s time to give it back. Peo­ple are pos­i­tively giddy about get­ting a tax re­fund. Of­ten, re­funds are the re­sult of over­with­hold­ing, mean­ing you gave the fed­eral gov­ern­ment more money than you owed.

By law, tax­pay­ers have just three years to claim a re­fund. So April 17 is the last chance to get your money for the 2014 tax year. The IRS says there are about $1.1 bil­lion in un­claimed fed­eral in­come tax re­funds owed to an es­ti­mated 1 mil­lion tax­pay­ers.

But like the lot­tery, where you have to play to win, you have to file to col­lect a re­fund. Live in Mas­sachusetts and didn’t file for 2014? The me­dian po­ten­tial re­fund is $935. In Mary­land and Vir­ginia, it’s $853 and $828, re­spec­tively. In the District, it’s $850. Wy­oming has the largest me­dian re­fund at $973. Na­tion­wide, the mid­point for the po­ten­tial re­funds for 2014 is $847, which means half of the re­funds are more than $847 and half are less, ac­cord­ing to the IRS.

So far this year, the av­er­age re­fund is $3,046 and the av­er­age in 2014 was $2,797.

Again, the only way you can claim your re­fund is by fil­ing. By the way, if you have not filed tax re­turns for 2015 and 2016, your re­fund could be held up.

“But if you can’t get the other re­turns filed, make sure you file the one that has an ex­pi­ra­tion date on it,” IRS spokesman Eric Smith said. And don’t worry, there is no penalty for fil­ing a late re­turn if you’re get­ting a re­fund.

Here’s an in­cen­tive to file: If you have an out­stand­ing tax debt to the fed­eral or state gov­ern­ment, the IRS will snatch the money. And that’s a good thing.

I’ve worked with a num­ber of peo­ple who were scared to file a re­turn think­ing they owed money. They didn’t. They were shocked to re­ceive hun­dreds and, in some cases, thou­sands of dol­lars in re­funds. These same folks some­times had out­stand­ing fed­eral and state tax debt. The re­funds helped make a tremen­dous dent in the debt they owed. For those with state tax debt, the IRS sent the money di­rectly to the tax­ing author­ity.

Re­funds can go to­ward unpaid child sup­port. They can also be used to off­set stu­dent loans.

Per­haps you’re a stu­dent or part-time worker and didn’t earn enough money to be re­quired to file. Yet your em­ployer still may have taken out fed­eral taxes. Many low- and mod­er­ate-in­come work­ers might have been el­i­gi­ble for the Earned In­come Tax Credit. In 2014, the credit for in­di­vid­u­als and fam­i­lies with low in­comes was worth as much as $6,143, ac­cord­ing to the IRS.

I know what you’re think­ing: Okay, I need to file, but I don’t have a clue where I put my W-2 or 1099 forms. Of course, you can ask your em­ployer for a du­pli­cate. Or you can or­der a free wage and in­come tran­script from the IRS. Go to and click the link for “Get Your Tax Record.” If you can’t get your W-2 on­line, file IRS Form 4506-T to re­quest the tran­script. You can also get prior-year tax forms on­line or call toll-free 800-TAXFORM (800-829-3676). Don’t pro­cras­ti­nate any fur­ther. Your prior-year re­turns have to be mailed.

You can get free tax­prepa­ra­tion help. Click the link for “Free file.” If your in­come is $66,000 or less, you can get help in fil­ing your fed­eral re­turn and, in many cases, your state re­turn. You’ll see a list of com­pa­nies of­fer­ing free soft­ware to file.

De­pend­ing on your in­come, you may qual­ify for free tax­prepa­ra­tion help through var­i­ous pro­grams. The Vol­un­teer In­come Tax As­sis­tance ( VITA) pro­gram of­fers as­sis­tance to peo­ple who have dis­abil­i­ties, speak lim­ited English or earn $54,000 or less. There is also the Tax Coun­sel­ing for the El­derly (TCE) pro­gram, which is mostly op­er­ated by the AARP Foun­da­tion Tax-Aide pro­gram. De­spite the ti­tle, help is avail­able to low- to mod­er­atein­come tax­pay­ers, not just the el­derly, and they spe­cial­ize in ad­dress­ing re­tire­ment and pen­sion-re­lated is­sues.

To find a VITA or TCE site near you, call 800-906-9887. Or you can search for lo­ca­tions at Search for “Find a Lo­ca­tion for Free Tax Help.”

If you’ve filed and want to know the sta­tus of your re­fund, go to the IRS web­site and search for “Where’s my re­fund?”

So, what hap­pens to your money if you miss the dead­line to col­lect your 2014 re­fund?

The money goes to the Trea­sury Depart­ment. Although the gov­ern­ment can use help in re­duc­ing the fed­eral deficit, I’m sure you could put your money to bet­ter use.

Michelle Sin­gle­tary THE COLOR OF MONEY

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