Only a few days ago, the Internal Revenue Service (IRS) issued a warning: Over 1.1 million Americans have until April 15 to file their tax year 2021 taxes and recover unclaimed refunds worth more than $1 billion.
The federal agency claims that noncompliance will result in the forfeiture of the monies, which will then be transferred to the US Treasury.
In essence, the federal government will appropriate that money since it becomes part of the US Treasury.
To put it another way, unclaimed funds are being distributed to the country, allowing Donald Trump and his government to spend them as they want because, well, nobody has claimed them.
Taxpayers who have unpaid refunds need to take immediate action
Although it fluctuates based on other benefits like the Recovery Refund Credit, the average expected refund amount is $781. According to the rules, reimbursement requests can only be made for a maximum of three years before the monies are turned over to the federal government.
With 116,300 prospective beneficiaries, California tops the list. Texas comes in second with 102,200, followed by states like New York, Florida, and Pennsylvania.
In addition to forfeiting the refund, the IRS stressed that taxpayers might no longer be eligible for benefits like the Earned Income Tax Credit (EITC), which for families with children could reach up to $6,728 in 2021. Funds may be withheld from persons who owe taxes, child support, or student loans in order to pay those debts.
How long does it take for my refund to arrive, and where is it?
To keep track of the progress of requests, the agency recommended using the “Where’s my refund?” service. Three stages are displayed by this system: return received, refund authorized, or refund issued. The IRS says updates happen once a day, generally overnight.
Mailing returns require at least four weeks to process, however electronic returns can be completed in as little as 21 days.
The deadline could be extended to 16 weeks if changes are needed. The IRS made changes in 2024 to cut down on delays, and as of 2025, it would permit the declaration of multiple dependents as long as a valid PIN is provided.
The IRS MATH 2025 Bill will require tax error notices to be clear
Senators Elizabeth Warren and Bill Cassidy sponsored the Internal Revenue Service Math and Taxpayer Help Act of 2025 (IRS MATH Act), which aims to change the 1986 Tax Code to mandate that the IRS reveal mathematical or administrative problems more openly.
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According to the plan, notices must include information about the exact line item on the affected return, the sort of error, the relevant legislative section, and a breakdown of changes into categories like gross income, tax credits, or sums outstanding.
Communications must also be written in simple language, have contact information, and prominently display difficult deadlines (in bold and size 14).
Listing “potential errors” without confirmation is forbidden; instead, all particular errors found must be mentioned.
According to the project, the IRS must provide written notice of any corrections (abatement) made, ensuring that the language is clear and outlining the changes in the corrected items.
Within 180 days of approval, taxpayers can request reviews in person, over the phone, in writing, or online using processes that the Treasury must set up.
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The new regulations would only apply to notices sent after the 12-month period following passage. This is meant to speed up disputes and prevent typical misunderstandings, including inexplicable refund reductions.
As evidence, the IRS must send out a statistically significant number of notices over the course of 18 months by certified mail along with an electronic receipt confirmation.
Data including the number of errors found, adjusted amounts, response rates, and the efficacy of the notification system will be reported to Congress by the Treasury and the Taxpayer Advocate.
Conclusions regarding the use of certified mail as well as suggestions for enhancing communication will be included in the report. This project aims to assess if formal delivery techniques draw in more taxpayers and cut down on lengthy litigation.
