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IRS owes taxpayers $1 billion for 2008

More than 1 million taxpayers who were due a refund failed to file. If you're one of them, you have until April 17 to claim your money.

By MSN Money Partner Mar 2, 2012 1:12PM

This post is by Kelly Phillips Erb of Forbes.com.

 

The Internal Revenue Service has extra cash: more than $1 billion in extra cash. Some of it might belong to you.

 

More than 1 million taxpayers who were due a refund failed to file a federal income tax return in 2008, resulting in more than $1 billion sitting and waiting to be collected. The IRS estimates that half of those refunds are worth more than $600 each.

 

How much is a billion dollars? I know we throw around these “illions”  (millions, billions, trillions) like they’re nothing, but it’s a lot of money. How much? If the IRS gave away a dollar an hour, it would take more than 114,155 years to get rid of $1 billion. Yeah.

 

Who is owed the most money? By the numbers, the IRS estimates that more folks in California (122,500) are owed refunds than taxpayers in any other state; the state with the least number of taxpayers owed a refund is Vermont (1,700). Taxpayers in Oregon are due the smallest average refund ($527), while taxpayers in Wyoming are owed the largest average refund ($773). (Post continues below video.)

If you are due a refund, you have to file a return. The return must be filed (meaning signed, properly addressed and postmarked) no later than April 17, 2012. If you are due a refund, there is no penalty for filing late. However, after April 17, 2012, the statute of limitations will have run out for 2008 returns, and you’ll be out of luck and your share will become property of the U.S. government.

 

Why might you be due a refund? Maybe you had too much withholding from your wages or made too much in quarterly payments. You might have been eligible for the Recovery Rebate Credit because you didn’t get a stimulus check that year (assuming you were entitled to one). You might have also been eligible for the Earned Income Tax Credit. These are refundable credits -- but you can’t receive the benefit of them unless you file.

 

Of course, if you owe the feds money (for student loans or back taxes, for example) or if your refund is otherwise earmarked for seizure (such as child support obligations), your refund will be offset by the amounts owed.

 

If you need a copy of the 2008 tax form, you can download one as a pdf here, visit the IRS website or call toll-free 1-800-TAX-FORM (1-800-829-3676).

 

Remember that you’ll need your forms W-2, 1098, 1099 or 5498 from 2008 in order to file. If you don’t have them, request copies from your employer, bank or other payer. If that doesn’t work, you can try ordering them from the IRS, filing a federal form 4506-T or calling 1-800-908-9946.

 

More from Forbes.com and MSN Money:

 

VIDEO ON MSN MONEY

79Comments
Mar 2, 2012 5:13PM
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545 vs. 300,000,000 People
-By Charlie Reese

Politicians are the only people in the world who create problems and then campaign against them.
Have you ever wondered, if both the Democrats and the Republicans are against deficits, WHY do we have deficits?
Have you ever wondered, if all the politicians are against inflation and high taxes, WHY do we have inflation and high taxes?
You and I don't propose a federal budget. The President does.
You and I don't have the Constitutional authority to vote on appropriations. The House of Representatives does.
You and I don't write the tax code, Congress does.
You and I don't set fiscal policy, Congress does.
You and I don't control monetary policy, the Federal Reserve Bank does.
One hundred senators, 435 congressmen, one President, and nine Supreme Court justices equates to 545 human beings out of the 300 million are directly, legally, morally, and individually responsible for the domestic problems that plague this country.
I excluded the members of the Federal Reserve Board because that problem was created by the Congress. In 1913, Congress delegated its Constitutional duty to provide a sound currency to a federally chartered, but private, central bank.
I excluded all the special interests and lobbyists for a sound reason. They have no legal authority. They have no ability to coerce a senator, a congressman, or a President to do one cotton-picking thing. I don't care if they offer a politician $1 million dollars in cash. The politician has the power to accept or reject it. No matter what the lobbyist promises, it is the legislator's responsibility to determine how he votes.
Those 545 human beings spend much of their energy convincing you that what they did is not their fault. They cooperate in this common con regardless of party.
What separates a politician from a normal human being is an excessive amount of gall. No normal human being would have the gall of a Speaker, who stood up and criticized the President for creating deficits. The President can only propose a budget. He cannot force the Congress to accept it.
The Constitution, which is the supreme law of the land, gives sole responsibility to the House of Representatives for originating and approving appropriations and taxes. Who is the speaker of the House now? He is the leader of the majority party. He and fellow House members, not the President, can approve any budget they want. If the President vetoes it, they can pass it over his veto if they agree to.
It seems inconceivable to me that a nation of 300 million cannot replace 545 people who stand convicted -- by present facts -- of incompetence and irresponsibility. I can't think of a single domestic problem that is not traceable directly to those 545 people. When you fully grasp the plain truth that 545 people exercise the power of the federal government, then it must follow that what exists is what they want to exist.
If the tax code is unfair, it's because they want it unfair.
If the budget is in the red, it's because they want it in the red.
If the Army & Marines are in Iraq and Afghanistan it's because they want them in Iraq and Afghanistan ...
If they do not receive social security but are on an elite retirement plan not available to the people, it's because they want it that way.
There are no insoluble government problems.
Do not let these 545 people shift the blame to bureaucrats, whom they hire and whose jobs they can abolish; to lobbyists, whose gifts and advice they can reject; to regulators, to whom they give the power to regulate and from whom they can take this power. Above all, do not let them con you into the belief that there exists disembodied mystical forces like "the economy," "inflation," or "politics" that prevent them from doing what they take an oath to do.
Those 545 people, and they alone, are responsible.
They, and they alone, have the power.

Mar 2, 2012 5:01PM
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Ah yes the IRS... If you miss your three year window you don't get refunded. However, they have 10 years to review and correct and come after you if you owe them. I am owed a refund  for 2004 but since I amended after 3 years I owe them 10K. I have liens on my house and wages garnished. I don't owe them a thing in reality. But the error was not caught in three years of filing.so they don't care, I owe what was originally filed in error. With penalties and interest it is at $15,000 and I have lost my bank accounts and wages. I am trying to sell my house to pay them off before it gets auctioned. You have three years to get it right else the IRS does not care about anything after 3 years except getting their money before 10 years. I lost my family and health due to this stupid rule. If they have 10 years to collect I should have 10 years to CORRECT!

Mar 2, 2012 8:11PM
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Let me get this straight. You have 4 years to claim your money from the irs. But the irs can go back seven years to get their money. This must be some of that new math I keep hearing about...
Mar 2, 2012 5:14PM
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They owed my wife and I about $5600. for 08, we said we would apply it to the next few quarterly payments, but because of some change in their computer system (according to them) they would not apply the refund nor pay it back to us. I finally opened a congressional inquiry through my U.S. Senators office (they were great) and 5 months later we got our refund plus $167. interest (do the math on that). I think their new system will be blamed for not reconciling names with SS numbers. The IRS is a huge bumbling bureaucracy and more than a little frustrating to deal with, it should be done away with and replaced with a consumption tax.
Mar 2, 2012 3:27PM
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Put it towards the deficit - call it good.
Mar 2, 2012 3:37PM
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Maybe a portion of the funds were paid in by people using Social Security numbers of deceased people and they don't want to file a return because the payment would have someone elses name on it.  Given that California has the most unclaimed returns and California has the most illegal aliens, stands to reason this is a possibility.  I wonder how far Texas is down the list.  My guess is not too far. 

 

Too bad it is not legal for the IRS to reconcile their records with the Social Security Administration.  That would help identify some of the potential problems.

Mar 3, 2012 9:59AM
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I am sure that all the extra money that the IRS has is due to illegal's working in this country with false documents and of course they are not going to file an income tax return , I can't believe how stupid and naive our government is. No wonder we are in the situation we're in.
Mar 2, 2012 3:33PM
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If the IRS was as smart as they think they are they would realize that every single one of those dollars came from ILLEGAL immigrants that had taxes taken out (the law) of their paychecks.Crying
Mar 2, 2012 9:41PM
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Sounds like a trap to me--since when does the IRS care about this. What they are trying to do, is get all the people that "didn't file returns" to file, guess what--then they can see who they are without alot of extra work. Then they will charge these people penaltys and interest thereby cleaning up their "books" for 08' with one advertisement.

 

Remember the cops game--"You won a new TV, come down to the Senior Center to claim it" everyone with a warrant got a notice, and most showed up.

 

"You can't fix stupid."

Mar 2, 2012 4:11PM
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those monies were paid to the irs by illegal immigrants using someone else's social security number.
Mar 2, 2012 3:55PM
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...put the over $1 billion into social security and call it good!! oh and add the interest it there too from 2008...
Mar 2, 2012 4:33PM
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So if the irs owes you money you better came and get it or it's theirs, but if you owe taxes they'll hunt you down!!!
Mar 2, 2012 3:40PM
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If tax return was not filed, then there is nothing owed.  Simply stated, you can't owe something from an estimate!  Now, since it is election time, some in the government want to reach out and offer this olive branch of extra cash... how nice!
Mar 2, 2012 3:22PM
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You can pay me 2 million dollars tax free in one lump sum, and I will spend the rest of my life tracking them down for you.  But I can not start until after I have accrued 12 months of dividends on the principle 2mil.
Mar 2, 2012 4:58PM
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Abolish the IRS by implementing the Fair Tax now! No federal returns to file EVER so the IRS will never have any excess dollars that need to be refunded.  The Fair Tax is in congressional bills HR-25 and S-13. It currently has 68 co-sponsors. Find out for yourselves at fairtax . org.

Mar 2, 2012 6:04PM
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most of the money is from illegal workers .  they are the ones not filing look at the state that is owed the most california  think some  illegal mexican with a fake social security card is going to  file ?
Mar 2, 2012 3:37PM
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Let me get this straight. The IRS owes taxpayers a billion dollars and we have until April 17 to collect? This is thier mistake and we have to follow up? If I owed the IRS 600.00 since 08 it would no longer be 600.00. What about the penalties and interest on our money?

Mar 3, 2012 1:13PM
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the irs knows that the excess comes from the illegal immigrants using stolen ssn's. 
Mar 2, 2012 5:27PM
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Tax people on what they spend not what they earn. That sounds like a good idea. I bet most criminals dont pay taxes because they dont even file. I wonder how much money that accounts for?

Mar 2, 2012 4:59PM
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Time to make em pony up with penalties and interest which is what they do to us!
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