WASHINGTON – The Internal Revenue Service is sitting on an estimated $40 million owed to 34,000 people in Maryland who did not file 1997 tax returns.
But don’t expect an IRS agent to come knocking on anyone’s door to hand over a check like Ed McMahon.
The IRS will go after people who owe back taxes. But a spokesman said the agency does not have the employees to track down people who might be eligible for a refund if they filed a tax return.
“If we owe the taxpayer, they’re obligated to file,” said Sam Serio, a spokesman in the Baltimore field office of the IRS.
And they should file soon. Uncle Sam will keep the money unless people file tax returns by April 16, when the three-year window shuts on claiming refunds.
Nationwide, the government owes about $2.4 billion in unclaimed refunds to 1.6 million people who did not file tax returns in 1997, according to IRS estimates.
Serio said IRS statisticians have not compiled numbers for money that may be owed from the 1998 or 1999 tax cycles. But from the 1996 to the 1997 filing year, the numbers were relatively stable, going from 33,000 who were owed an estimated $35 million in tax refunds to 34,000 who are owed about $40 million.
The IRS does not know for sure if people are due refunds until they file tax returns. It makes its estimates based on information that banks and employers forward to the federal government, Serio said. Sometimes low-income earners who do not file returns may be due money back if they claim the Earned Income Tax Credit.
The IRS recently released a count of people who might receive a refund check if they were to file a tax return. It also routinely releases the names of people whose refund checks are returned because the recipients have moved.
Frederick County resident Paul Markuski found out about his 1999 IRS refund after a friend saw his name in a list published in The Frederick Post.
He contacted the IRS. In a few days he had his $34 refund.
Markuski’s refund was lost in the shuffle when he changed his mailing address. But Markuski, a self-employed insurance agent who files quarterly tax returns, was not satisfied with that excuse. He said the IRS ought to know how to find him.
Markuski has no doubts that the IRS would have been more diligent had he owed money.
“They would have found me for sure,” he said.
A spokesman for the National Taxpayers Union said the IRS has gotten better at informing the public of the unclaimed refunds. But “in the age of technology, where even junk mail catches up with you” the IRS continues to lag behind, said Pete Sepp, the spokesman for the taxpayer watchdog group based in Alexandria, Va.
The IRS works with the Postal Service to track people down. But Sepp said the IRS has been plagued by computer systems that can’t share information between its main and regional offices.
Sepp said some people do not file tax returns because they stumble over a complicated tax code. Others think their employer withholdings exactly match the federal income tax they owe. He said taxpayers — including students and part- time workers — should carefully compare their withholdings with tax owed in their income bracket.
“You may be pleasantly surprised you have a refund coming,” Sepp said.
IRS tax forms are available on the Internet at (www.irs.gov) or by calling 800-TAX-FORM (800-829-3676). The IRS help line is 800-829-1040.