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Millions in IRS refunds lay unclaimed

Mary Dalrymple
Associated Press
October 25, 2005

WASHINGTON (AP) — Thousands of people have money sitting at the Internal Revenue Service that could be claimed if they would just tell the tax collectors where they live.

The IRS said today that $73 million in tax refunds that were sent to taxpayers this year did not reach the destination. In most cases, the post office returned the checks as undeliverable because the taxpayers had moved.

The money belongs to more than 84,000 taxpayers, some of whom have more than one check waiting to be claimed.

Checking on the status of a refund — by calling 1-800-829-4477 or visiting IRS Web site at www.irs.gov — could be worth $871 to the average taxpayer due an unclaimed refund.

“Our goal is to get this money back in the hands of the people it belongs to,” IRS Commissioner Mark Everson said.

Refund checks can bounce back to the IRS for a variety of reasons. Most often a taxpayer moves, but sometimes the address is incomplete. Taxpayers who change their names after a marriage or divorce can sometimes encounter problems with mailed refunds.

This year, dislocations caused by Hurricane Katrina may have caused some refund checks go astray. The IRS said it will speed up searches for missing refunds owed to Gulf Coast residents and issue a new refund check when the original cannot be found.

Those taxpayers can use the special toll-free IRS hot line — 1-866-562-5227 — that the IRS set up for Katrina victims to track down a missing check.

Others should first check their records to make sure an expected refund never arrived. A feature on the IRS Web site allows taxpayers to check the status of a refund and, in some cases, resolve the problem that prevented its delivery.

The tool called “Where’s My Refund?” asks taxpayers for some information, including Social Security number, refund amount and filing status, such as single, head of household or married couple.

Taxpayers who have moved and want to make sure the IRS has the correct address can fill out Form 8822, available on the IRS Web site or by calling 1-800-TAX-FORM.

Taxpayers without access to the Internet can call the IRS toll-free at 1-800-829-1040 to claim a refund that never arrived.

In most cases, a taxpayer only has to provide a current address. In some cases, if a check got lost and never got returned to the IRS, the taxpayer might have to go through a claims process. Those problems are handled case by case, sometimes over the phone or sometimes with additional paperwork.

Refunds returned to the IRS are not stored. The checks are destroyed, but the amount due remains on taxpayers’ accounts. When the taxpayer claims the refund and provides a current address, the new check is printed.

Anyone due a refund who does not call the IRS to request a check can expect to get the refund next year after filing a tax return. IRS computers will note the new address and automatically generate a new refund check.

Taxpayers could be due several checks if they regularly file tax returns but move frequently, never receiving refunds due. The right to receive a refund never expires, but taxpayers have only three years to file a tax return and claim a tax refund.

“Most of them do eventually find their right home,” IRS spokesman Eric Smith said.

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