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Public Statements

Does The IRS Owe You Money?

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April 2004

DOES THE I.R.S. OWE YOU MONEY?

By Congressman Brad Sherman

Ben Franklin famously said: "In this world, nothing is certain, except death and taxes." While paying taxes can be painful enough, it is certainly the more preferable of the two options.

Tax day has arrived and many Southland taxpayers are awaiting their tax refund checks. But imagine if your check was for $171,000? Believe it or not, someone who filed their federal income taxes in Los Angeles County has a $171,000 refund check that remains unclaimed. This person is joined by 8,736 taxpayers from the Los Angeles area whose tax refunds were returned to the IRS because the taxpayer had moved without a forwarding address or because their checks were declared "undeliverable" by the Postal Service. Most of the returned checks are not as big as $171,000. The average size is $698.94, still a substantial amount of money.

If a taxpayer moves after filing a tax return and doesn't leave a forwarding address, the Postal Service returns the check to the IRS. If a person changes their name, perhaps after marriage, and doesn't notify the Social Security Administration, then their Social Security number will not properly match in IRS computers. This can slow or prevent the transfer of old refund checks to them. In the case of deceased taxpayers, some families and executors of estates may not know that they had an unclaimed refund.

These are only a few of the reasons why over $44 million worth of tax refunds were returned to the IRS nationwide in tax year 2003. The money will simply sit at the IRS until the one day someone hopefully claims it. It is the taxpayers' money, and it should go back to them.

People need to know about these undeliverable and unclaimed tax refunds so that they can claim their checks. The list of taxpayers is public information, but more needs to be done to publicize this list so that taxpayers can check to make sure they are not on it. The entire LA metro area list is available at www.house.gov/sherman. People can visit there to see if their name is on the list. If they do see their name, they need to call the IRS at (800) 829-1040 and ask for Form 3911 to claim their refund. Taxpayers can also call the IRS number and ask a service representative if they have an unclaimed refund.

These steps are only short term solutions. The IRS needs to improve its outreach to taxpayers who have these undeliverable tax refunds. The IRS takes strong steps to find taxpayers who owe money. It now needs to take stronger steps to reach out to taxpayers to whom the government owes money. To facilitate a solution, I am co-sponsoring the IRS Refund Accessibility Act, which will require the IRS to do more to find taxpayers with unclaimed refunds.

Congressman Brad Sherman represents the San Fernando Valley

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