In all, the IRS is looking for about 84,000 taxpayers who are owed $73 million in refunds, mostly from their 2004 filings. The main reason the checks came back is simple: The owed taxpayers moved after filing their last tax return and then forgot to let the IRS know their new addresses.
But it's also an easily correctible oversight. All you have to do is file Form 8822, Change of Address, now. If you can't download the form from the IRS's Web site, you can call (800) 829-3676 to request one. Once the agency gets your corrected mailing information, it will issue you a replacement refund check.
If you act quickly, you might get it in time to make a difference in your Christmas shopping budget. Even if it arrives after Dec. 25, you'll have the cash on hand to pay the credit card charges you ring up this month.
Gulf Coast residents whose residency was affected by Hurricane Katrina can get expedited help from the IRS in tracking down and recovering missing refund money. These owed taxpayers should call the IRS's special toll-free Katrina disaster line at (866) 562-5227.
Tracking down your refund
The IRS also has added a refund locator to its Web site for all filers who think that one of the undeliverable checks is theirs. To use it, you must enter your Social Security number, filing status and the amount of the refund shown on your tax return. If the money has come back to the IRS, the filer will get instructions on how to resolve the problem and get the correct refund.
For security purposes, your Web browser must have the latest encryption technology. If it doesn't, you'll get an error message. If you cannot or do not want to upgrade your browser, you can call the IRS toll-free at (800) 829-1040 to find out your refund status information. You'll need the same information required by the Web locator.
If you can afford to wait or are just too busy right now to be bothered with tracking down missing refund money, you can wait. Your unclaimed tax refund check will find you during the coming tax-filing season when you send in your 2005 return that lists your current, correct address. The IRS keeps the returned check information on file and will forward the money as soon as it gets valid delivery data. However, if you file Form 8822 now, you won't have to wait until you get around to filling all those tax forms to collect your cash.
Let the IRS know ASAP
But rather than trying to track down your check or waiting until you file your next return to get your money, don't become an owed taxpayer in the first place. Make sure your return's address is correct -- whether you write it in, type it on your computer or use a preprinted label.
When you do move, let the agency know your new address by filing Form 8822. Although the IRS is working more closely with the U.S. Postal Service to utilize the mailman's new-address data, using the IRS form to directly inform the agency of your address change is always a good move.
Other checks routinely come back because the recipient changes a last name, usually because of a marriage or divorce. Again, let the tax collector (via Form 8822), as well as the Social Security Administration, know this. Not only does such notification head off delays in processing tax returns and issuing refunds, it safeguards future Social Security benefits.
And executors should explore whether a refund check might be involved in an estate's settlement.
Collect directly
The IRS also suggests that instead of waiting for your refund via the mail, have it directly deposited into an account.
Around 52 millions filers used direct deposit in 2005. Their payments got to them more quickly, according to the IRS, and the method is more secure and convenient. There is no check to get lost -- or returned as undeliverable -- and no special trip to the bank to deposit a check.
To request direct deposit, simply follow the instructions on the "refund" line of your tax return. You can have a refund directly deposited regardless of which return (1040EZ, 1040A or 1040) you file.
You'll need to tell the IRS which type of account you have, the account number and the nine-digit routing number. Check with your account holder if you're unsure of the correct numbers to put here.
One other thing to keep in mind: Some financial institutions do not allow a joint refund to be deposited into an individually owned account.
Freelance writer Kay Bell writes Bankrate's tax stories from her home in Austin, Texas, and blogs each day on tax topics on her Don't Mess with Taxes blog.
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