ATLANTA — Unclaimed refunds totaling approximately $1.3 billion are awaiting over a million people who failed to file a federal income tax return for 2005. In Georgia nearly $39 million in unclaimed refunds awaits about 44,000 individuals. However, to collect the money, a return for 2005 must be filed with an IRS office no later than April 15.
“Time is running out if you want to get your 2005 refund,” said IRS spokesman Mark Green. “Taxpayers should review their statements for refundable credits and withholdings. During these challenging economic times, we want all Georgians to get the refund they’re due.”
The IRS estimates that half of those who could claim refunds for tax year 2005 would receive more than $538. In some cases, individuals had taxes withheld from their wages, or made payments against their taxes out of self-employed earnings, but had too little income to require filing a tax return. Some taxpayers may be eligible for the refundable Earned Income Tax Credit.
In cases where a return was not filed, the law provides most taxpayers with a three-year window of opportunity for claiming a refund. If no return is filed to claim the refund within three years, the money becomes property of the U.S. Treasury. For 2005 returns, the window closes on April 15. The law requires that the return be properly addressed, postmarked and mailed by that date. There is no penalty assessed by the IRS for filing a late return qualifying for a refund.
Checks for taxpayers seeking a 2005 refund will be held if they have not filed tax returns for 2006 or 2007. In addition, the refund will be applied to any amounts still owed to the IRS and may be used to satisfy unpaid child support or past due federal debts such as student loans.
By failing to file a return, individuals stand to lose more than refunds of taxes withheld or paid during 2005. Many low-income workers may not have claimed the EITC. Although eligible taxpayers may get a refund when their EITC is more than what they owe in tax, those who file returns more than three years late would be able only to apply it toward the taxes they owe (if any). They would not be able to receive a refund if the credit exceeded their tax.