IRS Has $2.3 Billion in Refunds for
Individuals Who Failed to File 1998 Returns

WASHINGTON - Unclaimed refunds totaling more than $2.3 billion are awaiting about 1.7 million people who failed to file a 1998 income tax return, the Internal Revenue Service announced today. However, in order to collect the money, a return must be filed with an IRS office no later than April 15, 2002.

"Time is running out for individuals to take steps to claim this money," said IRS Commissioner Charles O. Rossotti. "If no return is filed to claim the refund within three years, then this money will become the property of the U.S. Treasury."

The IRS estimates that about half of those who could claim refunds would receive less than $498. Some individuals had too little income to require filing a tax return but may have had taxes withheld from their wages. Others may not have had any tax withheld but would be eligible for the refundable Earned Income Tax Credit.

In cases where a return was not filed, the law provides most taxpayers with a three-year window of opportunity for claiming a refund. For 1998 returns, the window closes on April 15, 2002. The law requires that these returns be properly addressed, postmarked, and mailed by that date. There is no penalty assessed by the IRS for filing a late return qualifying for a refund.

The IRS reminds taxpayers seeking a 1998 refund that their checks will be held if they have not filed tax returns for 1999 or 2000. In addition, the refund will be applied to any amounts still owed to the IRS and may be used to satisfy unpaid child support or past due federal debts such as student loans.

By failing to file a return, individuals stand to lose more than refunds of taxes withheld or paid during 1998. Many low-income workers may not have claimed the Earned Income Tax Credit (EITC). Although eligible taxpayers may get a refund when their EITC is more than their tax, those who file returns more than three years late would be able only to offset their tax. They would not be able to receive refunds if the credit exceeded their tax.

For 1998, individuals qualified for the EITC if they earned less than $30,095 and had more than one qualifying child living with them; less than $26,473 with one qualifying child or less than $10,030 and had no qualifying child.

Current and prior year tax forms are available on the IRS Web site (www.irs.gov) or by calling 1-800-TAX-FORM (1-800-829-3676). Taxpayers who need help preparing prior year returns or gathering income records may call the IRS help line at 1-800-829-1040. To allow time for processing, forms and/or tax help should be requested by mid-March.

A state-by-state breakdown of tax year 1998 potential nonfilers and estimated refund amounts follows.

Tax Year 1998 Potential Nonfilers with Apparent Refunds

                            Total
             Estimated  Median   Estimated
             Potential  Estimate Refunds
Location     Nonfilers  Refund   ($000)
Alabama         28,100   $489     $27,618
Alaska           8,300   $514     $11,838
Arizona         35,000   $436     $42,014
Arkansas        15,300   $483     $14,329
Californi      181,000   $452    $221,646
Colorado        28,800   $453     $39,614
Connecticut     19,200   $560     $45,749
Delaware         5,800   $494      $5,949
DC               7,300   $465     $10,579
Florida        116,700   $504    $183,314
Georgia         63,300   $471     $74,075
Hawaii          10,600   $514     $13,550
Idaho            6,000   $435      $6,550
Illinois        73,900   $540    $118,799
Indiana         35,200   $530     $43,807
Iowa            16,200   $491     $14,112
Kansas          18,300   $478     $21,985
Kentucky        18,400   $491     $18,760
Louisiana       28,700   $503     $33,550
Maine            5,600   $451      $8,193
Maryland        36,800   $496     $45,034
Massachusetts   38,200   $541     $86,491
Michigan        75,100   $537     $94,802
Minnesota       23,200   $447     $24,342
Mississippi     15,200   $458     $14,362
Missouri        34,300   $479     $38,457
Montana          4,400   $449      $5,298
Nebraska         8,200   $466      $7,932
Nevada          19,400   $481     $30,434
New Hampshire    6,200   $565     $16,311
New Jersey      56,500   $547    $101,623
New Mexico      10,300   $454     $11,285
New York       106,900   $528    $185,817
North Carolina  52,100   $447     $51,842
North Dakota     2,300   $481      $2,170
Ohio            55,900   $500     $67,215
Oklahoma        23,600   $472     $22,500
Oregon          25,500   $420     $27,324
Pennsylvania    55,600   $524     $75,963
Rhode Island     5,500   $504      $6,777
South Carolina  21,500   $436     $20,296
South Dakota     2,900   $492      $2,945
Tennessee       27,800   $506     $34,727
Texas          135,900   $524    $181,908
Utah            10,800   $445     $14,439
Vermont          2,400   $441      $2,777
Virginia        49,900   $474     $59,809
Washington      46,100   $537     $66,647
West Virginia    5,000   $534     $11,456
Wisconsin       21,300   $466     $19,751
Wyoming          2,500   $503      $3,279
Armed Forces     7,300   $555      $4,805
U.S. Possess     2,500   $680      $4,434
Foreign Addr     4,500   $904     $27,071
Total        1,717,300   $498  $2,326,354

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