Haven’t filed ‘98 taxes? You might be owed money

Friday, March 15, 2002 | 9:30 a.m.

Forget your 2001 tax return that is due one month from today -- the Internal Revenue Service wants to know if you have filed your 1998 return.

About 1.7 million Americans who potentially would have received refunds for that year have not yet filed and are owed an estimated $2.3 billion. About 19,400 lived in Nevada and are owed about $30,430,000.

Bill Brunson, IRS spokesman for the southwest region, warns that if people don't file the 1998 returns by April 15, the money becomes property of the U.S. Treasury.

"This is part of a program where we are trying to reach both people who are owed refunds and people who owe (the IRS) money," Brunson said from his Phoenix office. "It is to encourage compliance with filing."

Brunson said the IRS in 1999 began the program to try to locate people owed refunds before the three-year limit expired. No statistics are available on whether that effort has resulted in a significant number of people filing for the unclaimed money.

The estimates of money owed are based on third-party reports such as employee W2 forms and on prior taxpaying histories of the non-filers, Brunson said.

In addition to the potential lost refunds, people who did not have taxes withheld might have been eligible for the refundable Earned Income Tax Credit, Brunson said.

For 1998, Earned Income Tax Credit qualifiers included people who earned less than $30,095 and had more than one child living with them; earned less than $26,473 with one child; or less than $10,030 with no children.

Brunson said there is no penalty for filing late if you are owed money. And, he said, even when interest and penalties are owed on IRS debts, "we will work with taxpayers by setting up repayment plans."

The situation of taxpayers not filing for refunds is no worse in Nevada than elsewhere in the United States, IRS records indicate.

The biggest to the smallest states had uncollected refunds of similar size. For example, California has an estimated 181,000 non-filers from 1998 who are owed about $221,646,000 while Vermont had 2,400 non-filers owed $2,777,000.

People who have refunds coming don't file for a number of reasons, one local tax expert says.

"First, the taxpayer could have died and no one followed up and filed for the refund," said Dan Miller of Professional Tax Service who has been preparing returns locally since 1967.

"Sometimes taxpayers simply move or they get divorced -- she has half of the tax records and he has the other half and neither of them bother to file."

Miller, whose office processes 300-400 late refunds each year, says people should not be afraid to seek help from the IRS on this issue: "The employees at the (Las Vegas) IRS office do an unbelievably good job helping people."

The IRS says 1998 refund checks will be withheld if 1999 and 2000 tax returns have not been filed. Also, the 1998 refund will be applied to any current amounts owed the IRS. The refunds also may be used to satisfy unpaid child support or past due federal debts such as student loans, the IRS said.

Current and prior year tax forms are available on the IRS website (www.irs.gov) or by calling toll-free (800) TAX-FORM (829-3676). Taxpayers who need help preparing prior year returns or gathering income records can call the IRS help line at (800) 829-1040.