The Shape of Tax to Come

A Tax & Estate Planning blog for 21st-century Texans

Texas, We have $114M That Belongs to You. Regards, IRS

The IRS is reporting that there is $114M waiting for Texans that have not filed their 2006 tax returns yet. If those 2006 returns are not filed by April 15, 2010, then taxpayers will not be able to claim the refunds and the money will revert to the government.

The Code has limitation periods to promote efficiency. After three years, the records are closed. This promotes efficiency for both the taxpayer and the IRS, as neither will be expected to deal with an tax year long after it has closed. It also has some harsh effects, as will be seen in twenty days.

Many people fail to file for various reasons. The $114M that the IRS is currently holding is likely in large part from automatic withholding from paychecks. If those people had more than was necessary withheld, that money is rightfully theirs. However, if they do not claim it within the three-year period, they will lose the right to claim the refund. It is a harsh rule, but easily avoidable.

Read the whole article here.

March 26, 2010 Posted by | Uncategorized | , , | Leave a comment

   

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