Agency Has $1 Billion in Unclaimed Refunds

Feb. 27, 2012 — -- People love to hate the IRS. But you could learn to love the agency if you're one of the more than 1 million people who are owed an unclaimed tax refund.

That's right, the IRS is trying to put the word out that anybody who didn't receive their 2008 tax refund has to claim it by April 17 or the feds are going to keep it. (OK, now you're allowed to love hating the IRS again!)

Believe it or not, this happens every year when people fail to file tax returns. What? You may think the IRS would want to punish people for not filing and that this is all some huge trick to get them to come forward. But it's for real, I promise.

Here's what happens. Every year, millions of people don't file tax returns because they made such a small income that they are not required to do so. However, those same people may have paid taxes throughout the year and may be entitled to some of the money back.

There is no penalty for failing to file a tax return when you are due a refund, and that's what these folks need to do now. Again, the due date is Tuesday April 17 -- eight weeks from today. In these tough times, the paperwork could well be worth it! The IRS estimates half of the 2008 refunds are for $637 or more.

For whatever reason, residents of Wyoming have the most money coming, on average, with a median value of $773. Oregon citizens can expect the least amount of money as a whole. But estimates like this really don't tell you much. $527 is the median check size in Oregon, which means half of the checks for Oregonians are for less than $527, the other half are for more.

File and then cross your fingers that you're one of the lucky ones!

And the tax man has one last pitch as to why it's worth it for folks to file. There was an economic stimulus payment in 2008 and if you didn't file, you didn't get it. And low- and moderate-income folks are typically eligible for the earned income tax credit and would have missed that.

For more information, see these links:Recovery Rebate Credit. Earned Income Tax Credit