Are you hoping for good news when you file your federal income tax return this year? For thousands of individuals, the good news may come if they would simply file their delinquent 2009 return. The Internal Revenue Service has announced that it has $917 million in potential refunds that taxpayers have not claimed because they never filed returns for that year. The funds remain available, without any penalty, but only until April 15th of this year. After that date, any unclaimed amount will be returned to the United States Treasury.
"There are a number of reasons why people may not have filed their tax return, the most common being that they had too little income to require a return, or the individual made quarterly payments. In both cases, filing a tax return could produce a refund," said Timothy Hughes, a Partner at Lavelle Law, Ltd. in Palatine. "Taxpayers can still file a return for 2009 up until April 15th of this year, and there is no penalty associated with doing so if that return produces a refund." The IRS has indicated that more than half of the refunds available are for amounts above $500.
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Hughes, who chairs Federal Tax Committee of the Northwest Suburban Bar Association, indicates that there are implications to filing now, both good and bad. "A properly calculated return may uncover missed opportunities including Earned Income Tax Credits (EITC) which could add to a refund. On the flip side, if a refund is due for 2009, but amounts are owed for 2010 or 2011, the IRS could hold the 2009 amount and use it to offset the subsequent year's obligations." In general, however, Hughes suggests it is always the best course of action to file a return under all circumstances. "First and foremost, it is the law and when you comply, it can do you some good. When you don't, it can only do you harm."
For forms and information needed to submit a 2009 return prior to April 15th, taxpayers can visit the IRS website at www.IRS.gov.
For further details on filing past due returns, individuals may call Tim Hughes at 847-705-7555.