What Happens to Unclaimed Tax Refunds?

After filing our tax returns, we eagerly wait for our tax refunds checks to arrive. We check our tax refund status online, and even if we the checks would arrive a week later, we keep checking our mailbox. This is the case with most of us. There are, however, few people who don’t seem to be much bothered tax refunds. This is the reason why IRS has around $123.5 million as unclaimed tax refunds.

This isn’t the first time for IRS. Ever year thousands of people don’t claim their tax refunds, leaving IRS with millions of unclaimed dollars. I sometimes think it’s quite weird. What kind of people doesn’t want their own money? This is never the case with me. Even if I own a penny, I keep checking the status, and my mailbox regularly.

Actually, IRS cannot be blamed in this case. Taxpayers file their tax return, and without giving any notice to IRS, they move to another location. Therefore, the check is sent to the old address of the taxpayer, and is returned back to the IRS. If you have recently changed your mailing address, make sure you inform IRS about it. And the process is very simple. You just have to fill up form 8822, and mail it to IRS. Few days later, call up the agency and confirm your changed address.

Alright, but what happens to the unclaimed tax refunds? How does the IRS use the money?

They don’t touch the money till three years. Tax payers are given three years to claim their refund. If they fail to do so, the money is forfeited by the US government.