If taxpayers do not file a return, they have three years from the date the return was due to claim their refund, in most cases. If a return is not filed within the three-year window, the refund becomes property of the U.S. Treasury. The time to claim a refund for the 2010 tax year is quickly running out. To collect the money, each taxpayer will have to file the 2010 tax return by April 15, 2014.
The IRS is encouraging everyone who has not filed a 2010 tax return to look into whether a refund might be due. Even those taxpayers who were not required to file a return because they had too little income should look into this as they may have had taxes withheld from their wages or made estimated payments during the year.
There is no penalty for filing a late return that qualifies for a refund. However, the IRS may place a hold on issuing the refund if the taxpayer has not timely filed returns for more recent tax years. Similarly, if the taxpayer has outstanding tax liabilities, whether to the IRS or to a state tax agency, the refund will likely be applied to those amounts due.
A taxpayer’s possible refund may include any available refundable tax credits, such as the Earned Income Tax Credit (EITC). A refundable tax credit can reduce the taxpayer’s tax liability below zero, and thus, can be refunded to the taxpayer. The EITC is available to many low-and-moderate income taxpayers. For 2010, the EITC could be worth as much as $5,666.00.
Taxpayers may look into whether they are due a refund for the 2010 tax year by requesting an IRS Wage and Income transcript for the year. IRS Wage and Income transcripts are a record of the wage and income information reported to the IRS for a given tax year. Taxpayers may request their Wage and Income transcripts through the IRS website here.
Submitted by Peter J. Graziano on