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Still Time to Claim Your 2007 Refund

Usually the IRS hunts down those who owe. Now, the agency is looking for people to pay.

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The IRS recently announced that refunds totaling more than $1.1 billion could be distributed to almost 1.1 million people who didn’t file a federal income tax return for 2007. The agency estimates that half of these potential refunds could be $640 or more.

The only “catch” – you’ll have to file that old return. Tardy filers have until this year’s deadline (returns must be postmarked by April 18, 2011). By law, taxpayers have a three-year window to file a return to claim their refund. After that, Uncle Sam gets unclaimed refunds.

No matter the size of an expected refund, though, you’ll get squat if you failed to file for 2008 and 2009. And the IRS will deduct whatever’s still owed to the government—be it unpaid child support or past-due student loans—from the amount of the refund. Still, there’s no penalty for filing late if you qualify for a refund. The problem? You’ll miss out on collecting that refund if you don’t file within the three-year window, says the IRS.

The agency posits a few reasons why certain taxpayers didn’t  file. Some people may not have met the income minimum for filing, even though taxes were withheld from their wages. What’s more, a number of low- and moderate-income workers may not have claimed the Earned Income Tax Credit. (Congress originally approved the EITC, a refundable federal income credit, in 1975 to help offset Social Security taxes and to provide an incentive to work.) If EITC exceeds the amount of taxes owed, qualifying taxpayers will get a refund. Still others may not have filed if they made quarterly estimations, mistakenly thinking they were “even with the government,” says I. Jay Safier, CPA and principal at Rosen Seymour Shapss Martin & Company LLP. Some taxpayers–partners in a partnership, the self-employed, and others who don’t have earned income–must remit tax estimates each quarter in lieu of withholdings. They’re not exempt from filing a return.

Readers, do you think three years is a fair grace period to file late returns and claim your refund?





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    • I do not even know with strong your blog greatly that saved me. God bless you “New discoveries in science will continue to create a thousand new frontiers for those who still would adventure.” – Herbert Hoover

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    • If the US government can collect taxes for up to 10 years past the due date for any given year then they should pay refunds over the same ten years period. plane and simple.

    • I think the 3 year limit is a crock! if you don’t file within 3 years but you have a refund coming, they (the Govt) just keep it, right? Well then, why is it that if you don’t file then they can come after you for 10 years to come after you? Not only that, they also tax on HUGE fees as well as RIDICULOUS interest fees to what you owe them! I think they should at least be fair on 1 side or the other! I mean, either give us 10 years to collect if we forgot to file or we realize we need to do an addendum, or drop their statute of limitations down to 3 years regardless of whether you’ve filed or not. That would actually be fair for once! But then again, we are talking about to government here. You know, I could’ve sworn I remember somewhere in my old high school history class something about OUR FOREFATHERS coming to this country and killing all these british soldiers who tried to following them to enforce this EXACT TYPE OF CRIMINAL BEHAVIOR!! As a matter of fact, the IRS really reminds me of the MOB, committing the same crime of racketeering that are government and police force deems “Illegal” (of course, it’s not illegal if the government does it, right? ~hey! Didn’t Nixon say something much like that during watergate?~) BTW, I hope I didn’t offend you guys in the mob by that comparison :-( I meant no disrespect to you guys, you have class and you don’t attack your own family… Besides, when you guys do any racketeering, at least it’s for a good reason (increasing the wealth of the family). our government on the other hand, they just keep increasing our taxes so that they can give it to all those worthless people who won’t even try and get a job, or even give back to society in any way whatsoever!!!

About The Tax Blog

  • The Tax Blog brings together a team of award-winning tax journalists from the Dow Jones network and around the web to examine the tax issues, changes and legislation that affect families, investors and small business owners. Our contributors include Tax Report columnist Laura Saunders (WSJ), Tax Guy columnist Bill Bischoff and senior reporter Jilian Mincer (SmartMoney.com), retirement-focused reporter Anne Tergesen (WSJ), wealth management writer Arden Dale (Dow Jones Newswires), TaxWatch columnist Eva Rosenberg and personal finance reporter Andrea Coombes (MarketWatch), and reporter Alyssa Abkowitz (SmartMoney). They’ll provide the latest news and insight, mine the tax code for tips and loopholes, and answer your questions about tricky tax situations. Contact the The Tax Blog with ideas, suggestions or tax questions at thetaxblog@dowjones.com.