Refunds
This is a bit off-topic but is an operational tax filing question.
The IRS just sent out a notice that “Time is Running Out to Claim $1.5 Billion in Unclaimed Refunds for Tax Year 2019”. The deadline is normally the tax filing date, but it seems the IRS has extended this date this year to July 17 due to the pandemic.
I’ve heard this announcement in previous years, and I’ve always wondered…..how does the IRS know the withholdings are refunds? Wouldn’t the individual have to file a return to determine if they are due a refund? How could a taxpayer file a return and not have the excess withholdings sent to them as a refund? Shouldn’t this be an announcement reminding individuals they must file a tax return to determine if they are entitled a refund?
Permalink Submitted by David Mertz on Thu, 2023-04-13 22:49
The IRS has sufficient information from Forms 1099-R, W-2 and others to be able to estimate what the refunds would be for a large portion of those individuals who have not yet filed their 2019 tax returns, so that’s how they can come up with an estimate of $1.5B. Still, until the taxpayer files the tax return, the IRS doesn’t know exactly what a particular individual’s refund would be. In many cases, what the IRS estimates for the refund would be the minimum.
Permalink Submitted by BruceM on Fri, 2023-04-14 17:48
Yes, that makes sense.But I still wonder why the IRS doesn’t notify these individuals that if they want a refund of their withholdings, they have to file a return? That just doesn’t make sense to me…unless these are individuals who have moved or otherwise cannot be contacted.