Unclaimed money from the IRS

Each tax season, the list of people with unclaimed money grows, even though millions of taxpayers receive their tax return check on the scheduled date. The Internal Revenue Service (IRS) has more unclaimed money than expected. In 2020 alone, the tax collection agency stated that there was at least $1,500,000,000 of unclaimed refunds since 2016, most of them, in favor of residents of the state of California. Wondering how to find out if the government owes you money? We leave you the steps to find money without claiming IRS.

How to know if the IRS owes you money

Where does IRS unclaimed money come from?

Most of the federal government’s unclaimed money is in the IRS. But where does the IRS unclaimed money come from? Of refunds not delivered to taxpayers, at least, in most cases. To understand this topic in depth, a few questions should be answered: what is a tax refund and why the federal government could owe you money without you knowing.

What is an unclaimed tax refund?

Unclaimed refunds are exactly that. You’ll see: when a taxpayer pays more taxes in the United States than they are entitled to, either by filing a tax credit, such as the child credit or the Earned Income Tax Credit (EIC, known in Spanish as credit for labor income), or by a tax amendment; there is an amount left over in your favor. These amounts of money can be refundable, as in the case of the child tax credit, or non-refundable, such as the Hope Credit (education tax credit).

When there is a difference between what has been paid in taxes and what should have been paid, the IRS performs a series of calculations to obtain a total amount and thus write a check in favor of the taxpayer. This check and the amount that goes with it is exactly what is known as a refund.

If that refund is not issued or, for any reason, is not delivered to the taxpayer, becomes IRS unclaimed money. The federal tax collection agency will keep that money for a period of three years, which gives anyone the option of recovering the capital or using it to pay debts to the IRS.

What does the IRS do with refunds?

Normally, when the IRS determines that there is a refundable amount of money in favor of the taxpayer, it sends a check for the full amount to the last address it has for the filer. This shipment is made through the United States Postal Service (USPS). If the taxpayer has registered a bank account, they could also issue a direct deposit. Hence the importance of keeping your data updated.

Taxpayers can track the status of their check through the “Where’s My Refund?” tool.; a kind of online platform that the IRS has launched to comply with the principles of transparency and accountability.

Note: You can also check the status of your refund through the IRS mobile application IRS2Go, available only for iOS and Android.

Keep reading: How much is the tax credit per child?

How long does it take for the IRS refund to arrive?

The time it takes for the tax refund to arrive depends on two factors: how the return was filed and what was the form of payment. Those who choose to pay taxes online, can wait for the check or transfer between one and three weeks, at most. Those who prefer to mail their tax return instead could have to wait up to eight weeks.

What happens if my refund does not arrive?

Most payees on the list of people who have unclaimed money are still waiting for their check from the IRS. These are citizens who possibly changed their address and did not update it on the platform. When this happens, the USPS returns the check directly to the IRS office.

The other percentage of taxpayers with unclaimed money at the IRS they expect a refund that does not exist at the moment, even though there is money in their favor in the coffers of Uncle Sam. This happens when, for example, the citizen sends his declaration and the IRS does not receive it. In this case, the agency will think that the person owes money and will not know exactly what the total amount is in their favor.

How do I know if I have unclaimed IRS money?

Everything it will depend on your particular case, that is, whether or not you filed a tax return:

Visit “Where’s My Refund?”

If you filed your tax return online, by mail or through tax programs; wait for your check or direct deposit. If three to eight weeks go by and you don’t receive a check in the mail or a transfer to the checking or savings account you have on file with the IRS, visit Where’s My Refund?

Contact the IRS in Spanish

If you don’t see an update under “Where’s My Refund?” or see a note asking you to contact the agency, call the IRS directly. You can also view your debt to the IRS online to verify that unclaimed refund money hasn’t been used to pay a penalty or outstanding balance. Requesting a transcript of debts and last statements by sending a request by mail could help you have more of your tax information on hand, this in case you need to make a claim.

Review and update your information

If you discover that the IRS owes you a refund and that it received your return, check that your information as a taxpayer is true and free of errors.. Register your bank accounts in the United States (the ones you use the most), check the balances of all the open accounts you have (in case the IRS sent a direct deposit and you haven’t found out) and update your tax address. You can do this online through “Where’s My Refund?”, by calling 1-800-TAX-FORM, or by filling out Form 8822.

File your back taxes

If you didn’t file your tax return, don’t worry: you have the option to file late taxes. The IRS allows taxpayers to receive unclaimed money from other years as long as they file their pending returns within three years of their due date. For it, you will need the latest W-2 or 1099 forms; in addition to completing a 1040 form.

Declare even if you don’t reach the minimum

If you do not reach the minimum amount to make taxes, check your numbers very well! There are people who do not earn enough and could still be entitled to a refund for the salary tax deduction. The ideal is to calculate the taxes of your check and verify that you do not have an amount in your favor. If you have it, the only way to collect it will be by filing a tax return so it doesn’t become unclaimed IRS money.

How to avoid having unclaimed money IRS

The best way to avoid unclaimed money from the federal government is to keep an eye on your finances. Be organized, know how many bank accounts you have in your name, and keep your information up to date with the IRS (especially your address, full name, marital status, number of children, etc.), will allow you to reduce the number of returned checks that have been issued by the Internal Revenue Service.

Another way to avoid having unclaimed IRS money is file tax returns online. This shortens the time it takes to send your refund, which could make you realize something goes wrong with your tax refund long before.

One trick that experts recommend to taxpayers to avoid losing Uncle Sam’s check is register a bank account with the IRS and request direct deposit scheduling. Of course: remember to keep your account open and active so that the transfer does not become unclaimed money.

Remember: When you register a bank account with the IRS, instead of receiving a stimulus check or tax refund check, you’ll get the money directly into your account without lifting a finger. Doing this will also protect you from tax fraud and identity theft.

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