IRS May Have Your Money!
Unbelievable as it may seem, the IRS says it’s holding $1 billion (yep, that’s billion with a “b”) in unclaimed tax refunds from 2013. An estimated 1 million taxpayers may be on the verge of donating their own money to the U.S. government.
Does the IRS Have Money That Belongs to You?
Unless a lot of Americans are keen to help Mr. Trump build that wall on the U.S. southern border or maybe put an undetectable dent in the already-huge-but-about-to-explode-federal-deficit, what explains the apparent inclination of millions of taxpayers to let the U.S. government keep money that rightfully belongs to them? Laziness? Senility? Too busy trolling Facebook and Snapchatting? Based on the statistics that I see, it’s certainly not that we’ve all already saved more than enough for retirement.
How can you guess whether any of that free money in the Treasury belongs to you? First: Did you file a tax return for 2013? If “no,” then part of that $1 billion could be yours.
How Large Might Your Unclaimed Refund Be?
Maybe you don’t want to go to the trouble of filing your 2013 return now, thinking it’s not worth your trouble for a few bucks.
This is from the IRS new release on this topic:
“We’re trying to connect a million people with their share of 1 billion dollars in unclaimed refunds for the 2013 tax year,” said IRS Commissioner John Koskinen. “People across the nation haven’t filed tax returns to claim these refunds, and their window of opportunity is closing soon. Students and many others may not realize they’re due a tax refund. Remember, there’s no penalty for filing a late return if you’re due a refund.”
The IRS estimates the midpoint for potential refunds for 2013 to be $763; half of the refunds are more than $763 and half are less.
Maybe you’re wealthy enough that a possible free $763 doesn’t get your attention. Me? I’d file (if I hadn’t already).
The “drop dead” date for filing a 2013 return and claiming any refund you have due is this year’s tax filing deadline: Tuesday, April 18.
If you don’t file your 2013 return by April 18, your money is lost to the feds for good. Think of that final warehouse scene in Raiders of the Lost Ark.
Is There a Catch? Maybe.
Full disclosure: If you’re in the rather risky habit of not filing tax returns or if you’re a scofflaw, claiming your 2013 refund could open a can of worms you’d rather see undisturbed. From the IRS:
The IRS reminds taxpayers seeking a 2013 refund that their checks may be held if they have not filed tax returns for 2014 and 2015. In addition, the refund will be applied to any amounts still owed to the IRS, or a state tax agency, and may be used to offset unpaid child support or past due federal debts, such as student loans.
Note that the reference to student loans or other federal debts is to past due debts. If you have a student loan but are making payments, no worries.
The IRS theorizes that a significant chunk of the $1 billion in 2013 refunds consists of unclaimed Earned Income Tax Credits. This incredibly valuable credit accrues to low and middle-low income taxpayers, many of whom may not bother to file on the assumption that they won’t owe any tax. But they fail to realize that they’ve left on the table the EITC, worth up to $6,269 for the 2016 tax year.
Should You File a 2013 Tax Return?
If you don’t owe the federal or a state government money and aren’t behind on child support, I recommend you file a 2013 return if you “overlooked” that year. If your 2013 income qualifies you for the EITC, definitely file a 2013 return. Here are the EITC eligibility income thresholds for 2013: