Claim a Refund Tax From 2006

While taxpayers are busy preparing their 2009 returns, the clock is ticking down for anyone who still could be claim a refund from 2006.

The Internal Revenue Service, or IRS, has an estimated $1.3 billion in unclaimed refunds due to nearly 1.4 million Americans. In Iowa, about $10 million went unclaimed by about 12,200 Iowans who did not file a federal return in 2006. About 51,400 Illinois taxpayers could get a piece of the $54.74 million in refunds that went unclaimed there.

The IRS stressed that taxpayers must file a 2006 return by April 15 in order to collect the refund. The agency estimates that the median unclaimed return is worth $596 in Iowa and $655 in Illinois.

“Especially in these tough times, we want to encourage people to review their records to see if they had tax withheld from their paychecks for 2006 but didn’t file a tax return,” said Christopher Miller, the IRS spokesman for Iowa. “Maybe they didn’t file because they didn’t make enough money to require filing, but they could be leaving money on the table.”

By law, most taxpayers have a three year window of opportunity to claim a refund even if they did not file a return. For 2006 returns, the window closes April 15, Miller said.

If the time expires and no return is filed, the money becomes property of the U.S. Treasury. The IRS said there is no penalty for filing a late return qualifying for a refund. While back-year tax returns cannot be filed electronically, taxpayers can speed up their refunds by having them deposited directly to their accounts.

According to the IRS, taxpayers will have their 2006 refund checks held if they have not filed tax returns for 2007 or 2008. In addition, refunds will be applied to any amounts still owed to the IRS or to satisfy unpaid child support or past due federal debts, such as student loans.

Miller said taxpayers also could be eligible for additional tax credits, such as the one-time telephone excise tax refund for telephone users including cell-phone users. Available only on the 2006 return, the special payment applied to long-distance excise taxes paid on phone service from March 2003 through July 2006.

The government’s standard refund ranges from $30 to $60, but taxpayers also can base their refund request on the actual tax paid. For more information, see the Telephone Excise Tax Refund page on IRS.gov.

In addition, many low and moderate income workers may not have claimed the Earned Income Tax Credit (EITC).