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Monday, February 28, 2011

IRS Is Holding $1.1 Billion in Tax Refunds

The IRS announced yesterday (IR-2011-21) that it is holding more than $1.1 billion in tax refunds averaging $640 for 1.1 million people who did not file a federal income tax return for 2007. To collect the money, a 2007 return must be filed by April 18, 2011.

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Comments

This is a load of crap, as well as a sting operation for dummies. If these people didn't file, then how would the IRS know that they were entitled to ANY refund, much less the exact amount?

Of course, a number of imbeciles will probably fall for this.

Posted by: Big M | Mar 1, 2011 1:21:17 PM

Its not a load a crap, although the amounts are probably overstated. The IRS gets W2 and 1099s and this is based on their calculations based on information they have. Of course, there may be additional income that wasn't separately reported.

More important though the author is NOT correct, assuming these folks filed for an extension, they actually have until October 15, 2011.

Posted by: Dave Beck | Mar 1, 2011 2:53:51 PM

I'm guessing they're basing it off of withholdings and W-2 information, for the most part. While it's true that many of these people may not actually be entitled to a refund due to other income earned, I don't see how it's a trap. Fill out the tax form, do the math, and figure out if you are entitled to a refund. If so, why not send it in?

Or am I missing something obvious?

Posted by: Walter | Mar 1, 2011 2:53:52 PM

The IRS doesn't like to give money back. Are they guaranteeing that those who file the return will get the refund? At any rate, why don't they just send these people the refund checks? This is sucker bait.

Posted by: Vic | Mar 2, 2011 4:35:40 AM

I would guess, based on what I see in my practice, that many of this comes from undocumented residents who use fake social security numbers, or they use tax id numbers. If they could file, they'd get money back because they'd be eligible for EIC and other tax credits. That's why the IRS won't just automatically issue a refund, because those credits have eligibility requirements.

Posted by: Anon | Mar 2, 2011 11:04:00 AM