The IRS is holding almost $760 million in unclaimed refunds relating to calendar year 2010 alone – waiting for almost 900,000 people who have yet to file their 2010 federal income tax returns to claim their money.
And the clock is ticking. Someone who is owed a refund for 2010 and has yet to file a tax return generally has only until April 15, 2014, to file. After that date, the refund is gone. The IRS is not allowed to process a refund claim filed more than three years late.
Returns seeking a refund must be properly addressed, postmarked and mailed by April 15. No penalties are assessed for filing late returns that qualify for refunds.
Those who have filed returns may wonder about their chances of being audited by the IRS.
Last year, the IRS examined about 0.8 percent of all returns filed in 2012 – generally for the 2011 tax year. That includes approximately 1 percent of all returns filed by individuals and 1.4 percent of corporation income tax returns.
Individual income tax returns with higher adjusted gross income (AGI) were more likely to be examined than returns with lower AGI. About one-third of the audited returns claimed the earned income tax credit.
Only 24.5 percent of the individual audits were conducted in person. The balance (75.5 percent) was handled entirely through correspondence.
Other statistics provided by the IRS include:
- About 2.7 percent of returns filed by individuals that included a business showing gross receipts in excess of $200,000 (other than a farm) were audited.
- About 0.4 percent of returns showing farm (Schedule F) income were audited.
- Nonbusiness returns showing positive income between $200,000 and $1 million were audited at a rate of 2.5 percent.
- For nonbusiness returns with income above $1 million, the audit rate went up to 10.8 percent.
For corporate returns, the audit rate rose the higher the total assets, as reported on the balance sheets filed as part of the returns. Returns showing total assets of $10 million to $50 million were audited at the rate of 7 percent, while 91.2 percent of returns with assets greater than $20 billion were audited.