Tax Tip of the Week
For the week of April 5, 2004

Act fast or you'll lose your refund

If you didn't file a tax return for the year 2000, you're not necessarily in trouble. In fact, you could be about to lose out on a nice refund check. The IRS reports that it is holding an astonishing $2.5 billion in refunds from the year 2000. Here's how the situation arose.

Nearly two million filers, many of them students and retirees, had taxes withheld from their earnings that year but didn't bother to file a return. That was quite legal if they didn't earn enough to reach the minimum income for required filing. And in many cases they forgot that taxes had been withheld and that they were eligible for a refund. For example, a student might have worked at a summer job, gone back to school in the fall, and not given taxes a second thought.

If you think you are due a refund for 2000, it's worth filing a return. The IRS estimates that around half those who are eligible would receive refunds of over $500. In some cases, you could find you're eligible for even more than the refund. If you were a low-income worker that year, you might also have qualified for the earned income tax credit. But you'll need to act fast. Unless you file a year-2000 return by April 15, 2004, the statute of limitations will have run and you'll be too late to claim your refund.

Be aware that the IRS won't issue a 2000 refund check unless you've also filed returns for years 2001 and 2002. And if you owe taxes for those years, they'll deduct that from the amount of the 2000 refund.

Contact our office as soon as possible if you think you might be due a 2000 refund.

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