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Never Mind 2015—Do Your Clients Have Their 2011 Tax Refunds?

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Mar 11th 2015
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In a new press release, the IRS reminds taxpayers that the window for collecting refunds for 2011 is closing fast (IR-2015-44, 3/11/15). The deadline for filing a federal income tax return for the 2011 tax year is April 15, 2015, or three years after the initial tax return due date—and that's approaching fast.

If you have clients who are due a refund and haven’t filed this return yet, it’s important to get the word out. The IRS says that the uncollected refunds total $1 billion, owed to more than 1 million taxpayers! Accountants should take a particularly close look at new clients, who may have done their own tax return work in past years and weren't aware they were leaving money on the table.

"Time is running out for people who didn’t file a 2011 federal income tax return to claim their refund", said IRS Commissioner John Koskinen in the press release. "People could be missing out on a substantial refund, especially students or part-time workers. Some people may not have filed because they didn’t make much money, but they may still be entitled to a refund.”

For cases where a tax return was never filed, the IRS provides you with a three-year window of opportunity for claiming a refund. If no return is filed to claim a refund within this three-year, the money belongs to Uncle Sam—no appeal is available.

The IRS is advising taxpayers seeking a 2011 refund that their checks may be held up if they haven’t filed tax returns for 2012 and 2013. In addition, the refund will be applied to any amounts still owed to the IRS, or their state tax agency, and may be used to offset unpaid child support or past due federal debts, such as student loans.

By failing to file a tax return for 2011, taxpayers stand to lose more than just refunds. For instance, many low-to-moderate income families fail to claim the Earned Income Tax Credit (EITC). The credit is worth as much as $5,751 on a 2011 return.

Last call: There’s plenty at stake here. The IRS estimates half of the potential refunds for 2011 are more than $698 . Even a small state like Wyoming has more than 2,000 taxpayers who are owed refunds, and in California, it's over 100,000.

Providing this "reminder" service can make you a hero in your clients’ eyes.

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