Las Vegas, NV (PressExposure) April 03, 2012 -- The IRS, has tax refunds totaling more than $1 billion waiting for about a million people to be claimed who have not filed a federal income tax return for 2008. The catch is, that this individuals or companies must file their 2008 tax return no later that April 17, 2012 in order to be eligible to collect the refund. There is only a three year window to make a claim for a tax refund, otherwise the billion dollars of unclaimed money becomes the property of the US Treasury.
The IRS estimates, that half of these potential 2008 refunds are $637 or more. "This money can be used to help pay down some credit card debt and other bills" says Palonek, founder of foundmoney.com, an internet website site specializing in helping people locate unclaimed accounts since 1995.
There are no penalties for filing a late return that qualifies for a refund.
It is important to note, that if a taxpayer is expecting a refund, their checks may be held if they have not filed tax returns for 2009 and 2010. In addition, if you owe unpaid child support or student loans any refund would be applied to these outstanding amounts, so according to Palonek, "this could be a quick and easy way to help with such arrears."
A good reason to file a 2008 return is that you stand to lose the Recovery Rebate Credit for those who did not receive an economic stimulus payment in 2008.
Additionally, low-and moderate-income wage earners may not have claimed the Earned Income Tax Credit (EITC), which helps individuals and families with incomes below certain thresholds. "As can be seen not filing your previous years returns can get very costly in lost income potential", says Palonek.
According to Palonek, "when a return is not filed, they may not Necessarily be breaking any laws, since they may have so little income that year, that they were not required to file a return. Additionally, if someone only worked a short time during the year but still had taxes withheld from a paycheck, the IRS may still owe them money for possible over payments of taxes during the time worked.
The highest number of 2008 non-filers with potential refunds are California, with 122,500, Texas, with 96,200, Florida, with 70,400 and New York, with 60,300, according to the IRS.
"In difficult times like these, every dollar counts so make sure to file tax returns on time so that you can maximize your refund to claim that foundmoney", says Palonek.