IRS Reaches Out to Taxpayers Who Left $1 Billion on the Table

Though some deride the Internal Revenue Service as “confiscatory,” the tax agency on Wednesday acted more like a state lottery authority imploring the winning ticket holders to come forward.

Some 1.1 million Americans in 50 states are eligible cumulatively for more than $1 billion in unclaimed refunds left over from the 2011 filing season, the agency said in a press release.

"Time is running out,” warned IRS Commissioner John Koskinen, citing a three-year window that closes April 15. "People could be missing out on a substantial refund, especially students or part-time workers. Some people may not have filed because they didn’t make much money, but they may still be entitled to a refund.”

Perhaps half of the potential refunds—many of them projected using the earned income tax credit—could top $698 for an individual, the IRS estimates.

If taxpayers who failed to file in 2011 do not do so retroactively by mid-April (no penalty applies to those entitled to a refund), their money reverts to the U.S. treasury.

A list of the number of individuals and potential amounts of unclaimed refunds broken down by state shows the states with the highest number of eligible taxpayers are California (103,700 taxpayers owed $92.2 million); Texas (101,800 taxpayers owed $103 million); and Florida (67,500 taxpayers owed $64 million). The states with the least were Vermont (2,100 owed $1.9 million); North Dakota (2,600 taxpayers owed $2.6 million); and South Dakota (2,600 taxpayers owed $2.5 million).

In the IRS’s other measures of productivity, its most recent filing season statistical update shows that as of Feb. 27, the agency had issued nearly 47.5 million refunds, worth almost $145 billion for tax year 2014. They averaged about $3,048, and were available on more than 80 percent of returns. It has processed some 56.8 million individual tax returns, or a third of the expected total.

Use of the IRS website is up 10 percent over last year, the agency reports, fulfilling a key agency goal at a time when its leaders argue that they are short-staffed.

(Image via karen roach/Shutterstock.com)