111 000 US Taxpayers Missing Their Tax Refunds

November 19, 2010 Taxation in USA

Yay! Ta Cash bonus day!!! WOOOO!The US Internal Revenue Service currently holds USD 164.6 million worth of tax refunds that are yet to be delivered to taxpayers, mainly due to clerical errors or outdated delivery and personal details.

The US Internal Revenue Service (IRS) is actively urging taxpayers to migrate to an electronic tax return filing system, pointing to the fact that a vast number of people are yet to receive their tax refunds simply because they could not be delivered to the right address due to old or inaccurate personal records. On November 17th the IRS reveled that a total of 111 893 taxpayers across the country are still waiting for their refunds, which were sent to them in the form of a cheque but were subsequently returned or deemed undeliverable.

According to the IRS, in 2010 the average tax refund amount grew by nearly 28 percent since the previous year. The IRS attributed the growth to several recent changes to the tax system which introduced new tax credits and expanded the scope of existing credits. However, the IRS data indicate that taxpayers who have not received their tax refund are less likely to take advantage of the tax changes, with only marginal growth being seen among the undelivered refunds. In 2010 the average unclaimed tax refund amount was USD 1 471, compared to USD 1 148 in 2009. It was added that there are numerous tax payers with consecutive years of returned refunds.

In an effort to reduce its own operating costs, administrative difficulties, and lower the occurrence of returned refunds, the IRS is urging tax payers to utilize the electronic filing systems. According to the Service’s website, users of an e-filing system can receive information about their return in 72 hours after it is acknowledged, compared to a time-frame of four weeks for a paper return. The electronic system also encourages users to receive refunds by direct deposit, greatly reducing administration costs and times. It would also reduce the occurrence of tax refund scams as taxpayers would be communicating with the IRS directly, leaving no room for illicit or legally ambiguous third-party interference.

Photo by Scott MacLeod Liddle