By  Updated on Fri Dec 2, 2011

Does The IRS Owe You Money?

 

We always read about people coming under legal fire from the Internal Revenue Service for tax evasion, but the media rarely reports on those the IRS fails to deliver tax refunds to. Right now, the IRS is looking to return $153 million in tax returns that failed to get into the hands of tens of thousands of U.S. taxpayers. Maybe one of those taxpayers is you.

People usually don’t forget a debt, and the IRS is no exception. Tax evaders spent an average of 24 months in prison in 2011—an amount of time hopefully long enough to deter some from not paying their taxes. But, the IRS’s duties aren’t just limited to catching tax evaders; the agency often also has sniff out taxpayers that, for some reason or another, haven’t claimed their tax refunds.

According to the government agency, the average amount of each unclaimed tax return check in its possession equals $1,547 for this year alone. The amount owed includes all tax filing years up to 2010, and is several thousands of dollars short of the $266 million owed to taxpayers back in October 2008.

Wait—I Didn’t Get My Tax Return!

If you’re still waiting for your 2010 tax return to arrive then you’ll be happy to know that there’s no deadline on when you can claim your cash—regardless of the tax year your refund is for.

For those that think they may be owed a federal tax refund, you can easily find out on the IRS’s website using a tool called “Where’s My Refund.” The services allows you to find out the status of your refund and can even offers instructions on the best way to get your money back.

If you want to avoid being one of the thousands of taxpayers that don’t receive their tax refunds then sign up to have your refund direct deposited into your primary checking account instead of opting to receive a paper check. In addition to saving trees, you’ll also receive your cash quicker.

Wait—I Think I Owe The IRS Money!

If you’re not lucky enough to be owed money by the IRS and, instead, have tax liabilities then don’t fret—you have options. This past August the IRS announced tips to aid taxpayers struggling to pay off their tax liabilities and get a fresh start. The most important thing to remember is that you don’t want to ignore whatever liabilities you owe.

One suggestion? Either take out a loan or put your tax liabilities on a credit card. The rationale behind this is that the interest you’ll pay on either a loan or a credit card is significantly less than what you’ll pay the IRS in interest and penalties for opting to either work out an installment agreement or through delaying payments.

If you’re unable to secure the credit to pay off your taxes then you should also consider either having a portion of your earnings automatically withheld, or participating in an installment plan. Check out the full list of tips on the IRS’s website. And, don’t forget that you can always amend a prior year tax return if you think you may have made filing errors.

If you are one of the few lucky people that does end up getting your money from the IRS consider putting it into a savings account or CD.

 

 

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