IRS Holds Billions in Unclaimed Tax Refunds

By KAY BELL

Forget about your 2007 tax return for a minute. If you didn't file one for 2004, you might be missing out on some money from back then. But you're quickly running out of time to claim it.

Three years ago, around 1.3 million individuals apparently decided they had better things to do than file their 2004 tax returns, even though they were due refunds. In total, almost $1.2 billion worth of refunds from that tax year is still sitting in the Internal Revenue Service account.

Taxpayers can still get their old refund checks, which the IRS says could amount to more than $700 for some folks. But the claim, via a 2004 Form 1040, must be made by April 15. After that, the federally allowed three-year window of opportunity from the original filing deadline, which was April 2005, closes forever and Uncle Sam gets to keep the cash.

The IRS estimates that the median refund -- meaning half of the checks will be larger and half smaller -- is $552 and some of the money is owed to taxpayers in every state and the District of Columbia, as well as to residents of U.S. territories and military filers who didn't file returns that year.

5 states with most unclaimed refunds

State	Unclaimed refunds	Median refund amount
California	149,500	$507
Texas	96,600	$582
Florida	93,900	$575
New York	76,600	$612
Illinois	50,000	$608

California is home to the most taxpayers (almost 150,000) who didn't send in returns years ago, accounting for more than $134 million of the total unclaimed pot. But Alaska residents will likely collect larger checks. The median unclaimed refund check for residents of the Last Frontier is $643.

And technically, the biggest refunds, with a median unclaimed check of $770, are owed to almost 5,500 nonfiling members of the armed forces who are stationed in various locations.

For a full list of all 50 states and their median unclaimed returns, see "Unclaimed tax refunds by state."

Not an uncommon oversight

Despite the staggering amount, the IRS says that unclaimed refund money is not that unusual.

Looking for help with taxes? You're in the right place. View and print the most current forms from the IRS.

Each year, some people don't file a return because they don't owe taxes. But without the documentation, these folks won't get any refunds they're due. The IRS doesn't send refunds until it gets a Form 1040 (or 1040A or 1040EZ) that details just how big the government's check should be.

Other taxpayers had income tax withheld but didn't have to file a return because they earned too little. But the only way they can get the withheld money back is to file a return.

Then there are individuals who were eligible for but didn't take the earned income tax credit. This is a tax break for workers who don't earn much. It can actually rebate cash to qualified filers -- even those who owe nothing. In 2004, individuals qualified for the earned income credit if they made less than $11,490 and were childless, earned less than $30,338 and had one child, or earned no more than $34,458 and had two or more kids at home.

No penalty, but no payoff either

There is no penalty for late-filing in cases where the taxpayer is due a refund. However, if you subsequently ran up an IRS bill that you didn't pay or you owe another debt of concern to the government, such as child support or a student loan, you may not get all of your 2004 refund. In these cases, once the nonfiler finally gets a return to the IRS, the tax cash will be applied to outstanding charges before any remainder is refunded.

If you think some of the refund stash is yours, you can download a 2004 Form 1040 from the IRS Web site. If you need an old 1040A or 1040EZ instead, you can find them at the agency's index of past-year forms.

The IRS recently unveiled the 12 most common tax scams affecting American taxpayers.

IRS Dirty Dozen

Be sure to check out the 2005 and 2006 documents, too, if you didn't file a return for those years either. The IRS won't send you your 2004 cash unless you filed in subsequent years.

And you'd better do it soon. After April 15, your refund money stays in Uncle Sam's pocket.

Return to the AOL Tax Center

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Aobicm2 05:22:39 PM Apr 18 2008

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irs could put that money into our schools systems nationwide, why should they keep it

Aobicm2 05:21:49 PM Apr 18 2008

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Irs could put that money into our school systems nationwide, why should they keep it

Gurule504 09:02:41 PM Apr 14 2008

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The Fairtax is the way to go. Not a value added tax. Study the the two. The fair tax is much better. It would do the same with all the illegal underground economy and all the Illegals that are in this counrty. They would pay there fair share. Go to www.Fairtax.org and learn of this proposal in Congress(HR-25) Senate(S-25) learn about this grassroots effort that is becoming very popular with Americans. It fair to all.

Billscaf 08:45:05 PM Apr 14 2008

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ABOLISH INCOME TAX AND INSTATUTE A VALUE ADDED TAX SO DRUG DEALERS,ILLEGAL IMMIGRANTS,AND EVERYONE ELSE WHO DOES NOT PAY TAXES WILL PAY WHEN THEY BUY THINGS. YOU CAN CONTROL HOW MUCH TAX YOU PAY BY CONTROLLING YOUR SPENDING. RICH PEOPLE WILL KEEP BUYING PLANES,CARS AND BOATS SO THEY WILL PAY MORE. IT IS A NO BRAINER SO WHY DO YOU THINK THE POLITICIANS WILL NOT DO IT???

JoFrenchIrish 08:22:46 PM Apr 14 2008

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LAWSOME AMEN ECHOING MY THOUGHTS<no truer thoughts expressed Waste not,want not If you want a change begin within yourself as OBAMA meant when spoke of life in general whether it be of small town people or Mid town or uptown people who wre angry about thingsStert from the bottom and SPEAK OUT work yourself UP

PCTDUDE 08:22:16 PM Apr 14 2008

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the white house has been on crack since the great society deal

BUTZIE1104 08:12:51 PM Apr 14 2008

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Golfinkatiekat77: I filed a tax return even though I had no income for proof of no income for certain reasons. The Tax Stimulus notice that came said you had to have at least $3000 in income(earned or unearned) for 2007 to be eligible for the rebate. So I am assuming I am not getting it--if I do, that is good, if I don;t, I wasn;t expecting it anyways. I am still waiting for my backpay from SSD--48 months worth..........

JoFrenchIrish 08:05:19 PM Apr 14 2008

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I think we all feel we are being overtaxed and are BITTER about it,How many are satisfied in herte today? how many live in small communitys like Mom and Dad did, where they have community board meetings, they probably attended them, do you?Hpw about their schools ,one room one teacher, now consolidated taught about howSEX is a subject, how to fight an win medals , how to sue.Along comes Obama an instills youth to go to rallys ,voice their thoughts,VOTE and not have to be over 21.Praise the Lord , TRUTH WILL WIN OUT,With the help of us all ,divided we will fall

Dodie1990 08:02:01 PM Apr 14 2008

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Illegals work for cash off the books and get welfare and medical benefits. U>S> citizens are supposed to work for 7.25 per hour pay taxes and get no benefits, it is not a level playing field. Lose your job to 7.00 per hour cash illegal see how you like it.

Cozar37 08:01:32 PM Apr 14 2008

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Seventeencats, Boy I would not want to be you at the Pearly Gates. When God asks you how you treated the "least of your brothers." I can just hear you. "compassion, who needs compassion? People derserve everything they get! even those children born in Africa..."I suppose they did something to bring on their plight. You are too much. You've got a lot to learn in your life. The karma coming your way is gonna be pretty painful. I don't envy you, Mr. Knowitall.

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