Unclaimed and Undelivered Tax Refunds – The IRS Owes You Money and You Don’t Even Know It!

The IRS is the first to notify you of your indebtedness to them, yet it remains silent when you are running a positive balance.

Brandon Lafving
by Brandon Lafving, IRS contributor (@TechDragoon)

Did you receive your tax refund this year? Did you neglect to send a tax return, thinking your income was too low?

You might have a stack of cash waiting for you.

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Every year, millions in unclaimed and undelivered tax refunds stack up in the IRS bank account. (In 2011, the IRS announced $153.3 million was waiting for taxpayers to pick up!) And the rightful owners of these monetary rewards do not know they have money waiting for them. There are a number of ways this can happen.

Undeliverable Tax Refunds

Every year, the IRS sends out tax refunds by mail to some 30 million Americans. Some of these are disbursed to old addresses and returned to sender. Others are lost in the mail and never cashed. If you filed your taxes manually and have not received your refund, then you should check to ensure your mailing address is current. You might also have a tax refund waiting for you without your knowledge.

READ: How to Get a Tax Refund

Unclaimed Tax Refunds

If you did not file taxes because your income level does not require you to file, the IRS might owe you a refund. This is because an Earned Income Tax Credit (EITC) has been awarded to low wage earners in recent years. If you qualify, the credit could easily outweigh your tax obligation.

This is true whether your work withholds money from your paycheck automatically or not. The amount of money you can receive depends upon your income and the number of qualifying children you have. If your Adjusted Gross Income (AGI) is under the Income Level in the chart below, then you can qualify for the maximum credit.

READ: Am I Being Taxed On My Fringe Benefits?

Even if your income is slightly above the line, you could qualify for partial credit.

Children (#)

0

1

2

3 or more

Income Level (individual/filing jointly)

$14,340/$19,680

$37,870/$43,210

$43,038/$48,378

$46,227/$51,567

Maximum Credit

$487

$3,250

$5,372

$6,044

 

If you did not file a tax return and think your Earned Income Tax Credit might earn you a refund this year, the IRS has an Earned Income Tax Credit page to guide you through the process.

If you believe you might have a refund waiting for you, use the "Where’s my refund" tool located on the IRS website. If you do not claim your rightful rewards within 3 years, you will be unable to claim them at all.

READ: Why Your Employer's Gym Membership Perk May Cost You at Tax Time

On the other hand, if you have three years of Earned Income Credits owed to you, the refund could really help you out this year.