Unclaimed tax refunds await those who file past returns

Nearly $5,000 in unclaimed refunds are still waiting for Montana taxpayers to file federal income-tax returns for 2002.

According to the Internal Revenue Service, about 4,300 people in Montana failed to file federal income tax returns in 2002, leaving $4,880 in unclaimed refunds. They can still collect that money, though, if they file a return no later than April 17.

The law allows most taxpayers three years to claim a refund. They can even request an extension and not file their 2002 tax return until Aug. 17.

The median unclaimed refund for Montana taxpayers is $493. A refund can be as low as $1, said Jean Carl, IRS spokeswoman in Denver. Any lower and it would cost more to print the refund than the refund itself was worth.

As for how high a refund may go, that depends on information provided by individual taxpayers, she said.

If, after three years, no return is filed to claim the refund, the money becomes the property of the U.S. Treasury.

This is different from a person who has filed a return and it somehow ended up at the wrong address or met with some other mishap, Carl said. Those refunds are kept on file forever and can still be claimed.

"We want people to get the refunds they're entitled to," IRS Commissioner Mark Everson said in a press release. "We urge taxpayers to double-check their records before the April 17 deadline. Taxpayers can't get a refund if they don't file a tax return."

Nationwide, unclaimed refunds for 2002 total more than $2 billion. Nearly 1.7 million people failed to file a tax return that year.

If people attempt to claim their 2002 refunds, they must also have filed tax returns for 2003 and 2004. Otherwise, their checks will be held.

The refund will first be applied to any amounts that taxpayer still owes the IRS. It may go toward unpaid child support or to pay past due federal debts, such as student loans.

Taxpayers eligible for Earned Income Tax Credit may also have missed out if they failed to claim it in 2002. They can still receive a refund if the credit is more than what they owe in taxes.

Tax forms for this and previous years are available on the IRS Web site at www.irs.gov or by calling 1-800-TAX-FORM. Taxpayers can also call the IRS help line at 1-800-829-1040.

Reporter Kristi Albertson may be reached at 758-4438 or by e-mail at kalbertson@dailyinterlake.com.