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by Harry Rabb, C.P.A.
Special to Tropical Breeze
From Washington, the Internal Revenue
Service reports (through its internet service at www.IRS.gov) that
it is looking for 115,478 taxpayers who are due refund checks worth
about $110 million after the checks were returned as
undeliverable.
The refund checks, averaging about $953,
can be claimed as soon as taxpayers update their addresses with the
IRS. In addition, some taxpayers have more than one check
waiting.
In an effort to show how responsive the
IRS is to the taxpayer, Richard Morgante, commissioner of the IRS
Wage and Investment Division reports that "(t)axpayers should not
miss out on getting their money back." Further, he says, "(t)he IRS
makes it as easy as possible for taxpayers to update their
addresses and claim their refunds."
The "Where's My Refund?" tool on
www.IRS.gov enables taxpayers to check the status of their refunds.
To check it, a taxpayer must submit his or her social security
number, filing status and exact amount of refund shown on their
2006 return. The tool will provide the status of their refund and
in some cases provide instructions on how to resolve delivery
problems.
Taxpayers can access a telephone version
of "Where's My Refund?" by calling 1-800-829-1954.
The number of undeliverable refunds each
year is a relatively small portion of all refunds returned to
taxpayers. So far in 2007, the IRS has processed nearly 105 million
refunds, totaling about $240 billion, either by mail or direct
deposit. In fact, undeliverable refunds account for less than
one-tenth of one percent of all refunds, or about one in a
thousand. A refund check is normally returned as undeliverable when
a taxpayer moves without updating his or her address with either
the U.S. Postal Service or the IRS.
The list of taxpayers due undeliverable
refunds this year rose about 21 percent from 95,746 last year. The
sharp increase is due in part to the Telephone Excise Tax Refund.
The refund is a one-time payment available on 2006 federal income
tax returns. It was designed to return to taxpayers previously
collected long-distance telephone taxes. Individuals, businesses
and tax-exempt organizations are eligible to request it. I
previously wrote about this 2006-only credit in the April 2007
edition of Tropical Breeze.
Refund checks are mailed to a taxpayer's
last known address. Checks are returned to the IRS if a taxpayer
moves without notifying the IRS or the U.S. Postal Service.
Taxpayers can update their addresses
online with the IRS on the "Where's My Refund?" feature of the
website. Also, taxpayers checking on a refund will be prompted to
provide an updated address if there is an undelivered check
outstanding within the last 12 months. Taxpayers checking on a
refund over the phone will be given instructions on how to update
their addresses.
A taxpayer can also ensure the IRS has his
or her correct address by filing Form 8822, Change of Address.
Download the form or request it by calling 1-800-TAX-FORM
(1-800-829-3676).
Those who do not have access to the
internet and think they may be missing a refund should first check
their records or contact their tax preparer, then call the IRS
toll-free assistance line at 1-800-829-1040 to update their
address.
Signing up for Direct Deposit can minimize
undelivered refunds, as well lost or stolen refund checks.
Taxpayers can receive refunds directly into personal checking or
savings accounts by providing the bank routing number and the
taxpayer's account number on the Form 1040. Paper filed returns
will report that information directly on the Form 1040 while
electronically filed returns generally digitally secure the
information during transmission and limit their reproduction during
print. Direct Deposit is available for filers of both paper and
electronic returns and it's easy as taxpayers can elect direct
deposit on their tax form.
As always, if you have any questions or
concerns, consult an experienced tax professional. That person
should be able to assist in any area involving the IRS, including
tracking down refunds.
• • •
This information is provided as a public
service and should not be construed as individual accounting or tax
planning advice. For information on how these general principles
apply to your situation, please consult an accounting or tax
professional.
Harry Rabb is a C.P.A. and owner of
Accounting Services, Inc., 935 Main Street, Suite D-1, Safety
Harbor. Call 727-725-4121.
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