MINNEAPOLIS (WCCO) — The Internal Revenue Service says it’s sitting on a billion dollars worth of refunds that have not been claimed.
The money belongs to people across the country who haven’t filed their 2014 federal returns.
There’s no penalty for filing a late return if you have a refund, but there is a deadline, and time is running out.
It’s a necessary but often dreaded part of being a working American… filling out the forms for income tax returns.
But by failing to file a return, you could be missing out on a refund.
WCCO’s Angela Davis talked with IRS spokesperson Raphael Tulino on the phone.
“What we are doing is saying, ‘Look these are refunds, and they are good estimates, but these are refunds, money owed to taxpayers for not filing a tax return for a particular year,'” Tulino said.
The year is 2014.
An IRS spokesperson says in Minnesota there are about 15,800 people who didn’t file a federal income tax return in 2014, but are owed a refund.
The median amount is $785, making the total nearly $16 million.
“Generally speaking, if you don’t file a tax return and you have a refund return there is no penalty. What you are doing is letting the government hold your money for you and not give it to you,” Tulino said.
The tax deadline is Tuesday, April 17 of this year.
“What we do is we say hey, we would like to have this money find its home,” he said.
Apprehension and confusion are what keep some people from dealing with the IRS.
Tracy Fischman is the executive director of Prepare and Prosper in St. Paul.
“There is no question that taxes in general can be intimidating and they are often very complex, and that is why people come to a place like Prepare and Prosper or other free tax sites around the state,” Fischman said.
At Prepare and Prosper, volunteers who are trained in tax preparation work with clients who qualify, for free.
“So if people are not sure, they should go to a free tax site and find out if maybe they left money on the table. We will see people who come to us with 2014 tax returns,” she said, adding, “For a lot of people they may not realize they are eligible for tax credits but they may be getting refunds. It may be because they don’t know they’re eligible, they’re intimidated, they may not have a place to go, or a good resource, they may be elderly, they may have mobility challenges, any number of reasons. They may have language barriers.”
By law unclaimed tax refunds become property of the U.S. Treasury after three years, if a return is not filed.
Not everyone is required to file an income tax return. You can have an income that’s below the required threshold.
Also, keep in mind if you owe the IRS money, you can work with them to pay it in installments.
Click here to see more information from the IRS about free tax preparation sites.