IRS holding $110M inundeliverable refunds

Worth an average of about $953 each, the checks can be claimed by their rightful owners as soon as those taxpayers – some of whom have more than one check waiting – update their addresses with the IRS.

“Taxpayers should not miss out on getting their money back,” said Richard Morgante, commissioner of the IRS wage and investment division, in a news release.

The “Where’s My Refund?” tool on www.irs.gov enables taxpayers to check the status of their refunds. Taxpayers must submit their Social Security numbers, filing status and amount of refund shown on their 2006 returns. The tool will provide the status of their refund, and in some cases, provide instructions on updating addresses and resolving delivery problems. Inquiries also can be made via telephone at (800) 829-1954.

In addition to the Web and phone options, taxpayers also can update their addresses by filing Form 8822, a change of address form that can be downloaded from the Web site or by calling (800) 829-3676.

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.

One in a thousand refunds

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 1 percent of all refunds, or about one in a thousand.

The list of taxpayers due undeliverable refunds this year rose about 21 percent from 95,746 last year. According to the IRS, that increase is due in part to the Telephone Excise Tax Refund, 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.

Another method of ensuring that refunds are distributed to their owners is the use of direct deposit. Taxpayers can sign up for direct deposit on their tax forms, and refunds will be put directly into personal banking accounts.