Thousands of Taxpayers Forego Refunds
An audit performed by the office of the Treasury Inspector General for Tax Administration examined $360 million in unclaimed refund money that the IRS is holding in an Excess Collections Account. The breakdown of unclaimed refunds includes:
- $25 million that should have been refunded to taxpayers who filed their returns late but within the allowable three-year time period for claiming refunds.
- $162 million that was forfeited by taxpayers who did not file a refund-bearing tax return within the allowable three-year time period.
- $173 million owing to taxpayers who have not yet filed a tax return but who are still within the three-year time period.
A major problem with tax returns that are filed late is that the IRS computer does not keep track of payments that have been transferred to the Excess Collections Account when it is assumed that the taxpayer is not going to file a tax return. When the tax return is actually filed, there is no record of payment and in some cases the IRS assumes a balance due. There have been situations of tax liens being filed even though a refund is due the taxpayer.
The moral of this story? File your tax return on time!
Voice of the Editor
Which isn’t completely true. I mean, occasionally I drop by when I manage to sneak out of the nonstop frat party over at Going Concern, but I’m mostly a wallflower over there. I’m happy to say that I’ve been given express permission (or explicit orders, if you like) to wander over here to AccountingWEB more often.
Why is that, you might ask? My job is to replace the irreplaceable Gail Perry as Editor-in-Chief. What does that mean? I don’t really know! I think it’ll be fun getting a feel for things, throwing in my own thoughts here and there, and listening to the discussions you’re having about the accounting profession.