We all like the idea of being able to get FREE money. Whether it’s when we find a few bucks of loose change in our couches, or it’s Fall and we pull out that jacket we haven’t worn in almost a year only to discover a $20 bill lodged in one of the pockets; then there’s always that moment you find a gift card stuck at the bottom of then dresser drawer and now have $25 bucks to spend at your favorite store. Additionally, in less than a month, the IRS has put a special group of people on notice that their tax refund will “fly away in the wind” if they don’t file soon.
The IRS claims that refund, which will total over $917 million nationally, may still be waiting for a rough estimate of a million taxpayers who did not file a federal income tax return for 2009. The IRS estimates that half the potential refunds exceed $500. (source: accountingtoday.com) The most common cause for failure to get a refund is simply not filling out a tax return. However, a close number two is the fact that the IRS simply has an undeliverable mailing address. We know it isn’t a good idea to loan the government money, but not giving them the right address to get your money back? What a huge mistake!
If the IRS does not receive a return, they may send out what is called a CP81 Notice with the following warning:
“We haven’t received your tax return for a specific tax year. The statute of limitations to claim a refund of your credit or payment for that tax year is about to expire.”
Taxpayers receiving this notice are encouraged to immediately file the missing tax return. If money is owed in later years, the refund will be applied to that tax return. This can really hurt you in terms of getting your money because they will automatically apply your cash to what they think you owe them. Guess what? They won’t even contact you at all. If no money is owed, the IRS will issue the taxpayer a check for the overpayment.
Once you file the return, your information can be obtained from the IRS’s “Where’s My Refund” website 72 hours after the IRS receives an electronic return. Information for tax returns mailed to the IRS can take as long as three to four weeks to obtain. This will be a lot easier than calling your accountant every few seconds to ask about your refund. As a side note, most states also have a ‘Where’s My Refund’ option as well.
To collect a refund for 2009, you must file the tax return no later than April 15th of this year. The law provides you generally with a three year window of opportunity to file an amendment or claim a refund. After that time passes, the money becomes property of the U.S. Treasury. You won’t have any penalties if you’re filing a late return to qualify for a refund. The IRS likes to hammer you with interest if you are late and owe them money, but they won’t be accruing interest on your refund, so the sooner you file the better.
If you are behind on filing returns for prior years, it’s best to get them completed no matter what your status. It’s hard to imagine that taxpayers will let almost a billion dollars potentially go down the drain. 30 days and counting to claim your share of the pie!
CFP®, AAMS®, AWMA®, CRPC®, CMFC®, CRPS®
Editor in Chief of Your Smart Money Moves
Co-CEO and Founder of oXYGen Financial, Inc – The Leaders in Gen X & Y Financial Advice and Services
Ted Jenkin is one of the foremost knowledgeable professionals in giving financial advice to the X and Y Generation.
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