Taxpayers who have fallen behind on their paperwork — way, way behind — have a $2 billion incentive to get caught up.
The IRS owes more than $2 billion to more than 1.7 million people who never filed tax returns for 2002. Half could get checks worth more than $570.
To collect the refunds, taxpayers must file a 2002 tax return before this year’s April 17 filing deadline. The IRS urges taxpayers to check their records and seize the opportunity to claim their money.
“We want people to get the refunds they’re entitled to,” IRS Commissioner Mark Everson said Tuesday. “Taxpayers can’t get a refund if they don’t file a return.”
The IRS gives people three years to claim a refund before the money becomes the property of the U.S. Treasury. Taxpayers face no penalties for filing a late return if the IRS owes them a refund.
People due a refund, in many cases, did not make enough money to be required to file a tax return but paid too much in taxes during the year. Taxes could have been withheld from paychecks, or a self-employed taxpayer may have made tax payments on earnings.
Some may be eligible for the earned income tax credit, a benefit designed to pull the working poor out of poverty. It can mean a big refund to families that meet its requirements.
In 2002, a person with two or more children who earned less than $33,178 may have qualified for the earned income tax credit. A person with one child who earned less than $11,060 may have qualified, and a person without children who earned less than $11,060 may be eligible to claim the credit.
Taxpayers must be caught up on their paperwork to get a refund check. Those due a refund for 2002 must have filed returns for 2003 and 2004, or else the IRS will hold the money until those returns are filed.
The tax refund could be applied to taxes owed, unpaid child support or unpaid federal debts, like student loans.
Forms and instructions for prior years can be found on the IRS Web site, or they can be ordered by calling 1-800-TAX-FORM (1-800-829-3676). The IRS also has a toll-free help line, 1-800-829-1040.